The two chief reasons why deficits and debt matter are that they i.lower credit ratings and increase interest rates.
Ii)redistribute consumption across generations.
Iii)create an income gap.

Question

Quizplus · Accepted Answer

The statement mentions two reasons why deficits and debt matter:

i) Lower credit ratings and increased interest rates, which directly affects the government's ability to borrow and pay back loans, and can have ripple effects on the economy.

ii) The redistribution of consumption across generations, as deficit spending can lead to increased debt burden for future generations.

There is no mention of an income gap as a reason why deficits and debt matter. Therefore, the best choice is C which includes both reasons mentioned in the statement.

The Two Chief Reasons Why Deficits and Debt Matter Are