Which of the following is an unintended consequence of austerity policies?

Question

Quizplus · Accepted Answer

Austerity policies typically involve cutting government spending and increasing taxes in order to reduce budget deficits and debt. However, this can often cause a reduction in economic growth and an increase in unemployment, which ultimately leads to lower tax revenue and a larger budget deficit. Therefore, option B (large budget deficits) is the unintended consequence of austerity policies. Hyperinflation is unlikely to occur as austerity policies focus on reducing government spending and increasing taxes to control inflation. Reduction in taxes and reduction in unemployment are not typically unintended consequences of austerity policies, but rather the intended outcomes.

Which of the Following Is an Unintended Consequence of Austerity