A budget deficit ________.
A)may have stimulative effects on economic activity in the short run
B)contributes to lower interest rates in the long run
C)is likely to increase future productive capacity in the long run
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

A budget deficit may have stimulative effects on economic activity in the short run through increased government spending and consumer demand. However, it does not necessarily contribute to lower interest rates in the long run, and it is not likely to increase future productive capacity in the long run.

A Budget Deficit ________