The standard view of the budget deficit is that a deficit:
A)does not affect the economy in the long run.
B)and the public debt are a burden on the economy.
C)does not affect the economy in the short run.
D)encourages economic growth.

Question

Quizplus · Accepted Answer

The standard view, including that of most economists, is that a budget deficit (spending exceeding revenue) and the resulting public debt can be a burden on the economy in the long run. A high level of public debt can lead to higher interest rates, slower growth, and reduced competitiveness. While deficits and debt may not have an immediate negative impact, the long-term implications can be significant.

The Standard View of the Budget Deficit Is That a Deficit