Assume the U.S.government was to decide to increase the budget deficit.This action will most likely cause __________ to increase.

Question

Quizplus · Accepted Answer

When the government increases the budget deficit, it will have to borrow more money to finance its spending. This means that there will be an increased demand for borrowing, leading to higher interest rates. The government's increased borrowing may also lead to increased government debt, which can also lead to higher interest rates. So, both A and B are likely to increase when the U.S. government increases the budget deficit. However, this action is not likely to directly affect unemployment rates (choice C).