When the economy is growing in real terms, the government can service a growing real debt without having to increase tax rates.

Question

Quizplus · Accepted Answer

When the economy is growing in real terms, it means the total output of goods and services is increasing, leading to higher incomes and revenues. This growth can generate additional tax revenues without increasing tax rates, allowing the government to service a growing real debt.

When the Economy Is Growing in Real Terms, the Government