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In a Democratic Setting, Debt Financing Is Attractive to Elected

Question 48

Multiple Choice

In a democratic setting, debt financing is attractive to elected political officials because


A) it makes it possible for them to spend on current projects favored by their constituents without having to levy current taxes.
B) it drives up interest rates, which encourages saving.
C) it leads to higher taxes in the future, which will tend to slow economic growth.
D) it makes the cost of government more visible, which will help voters allocate government spending more efficiently.

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