The opportunity cost of deficit spending is likely to be low:
A)only when it creates new physical capital.
B)only when it creates new human capital.
C)only when it improves existing physical capital.
D)only when it improves existing human capital.
E)when it creates or improves physical or human capital.

Question

Quizplus · Accepted Answer

The opportunity cost of deficit spending is likely to be low when it creates or improves physical or human capital. This is because deficit spending can lead to investments in infrastructure or education, which can enhance the productivity and potential of the economy in the long run. Therefore, the benefits of deficit spending on physical or human capital can outweigh the costs in terms of increased debt or interest payments.

The Opportunity Cost of Deficit Spending Is Likely to Be