Deficits are a burden on future generations if they
A)cause higher rates of inflation to occur.
B)are not used for government capital formation.
C)cause national saving to fall.
D)are always a primary government deficit.

Question

Quizplus · Accepted Answer

Deficits reduce national saving, which means that future generations will have less capital to work with, potentially lowering their economic well-being. Higher inflation rates (A) may or may not be the result of deficits, depending on other factors, and deficits do not always have to be used for government capital formation (B). Choice (D) is not true, as deficits can have many causes beyond government spending.

Deficits Are a Burden on Future Generations If They