The government's future period budget constraint is:
A) G' + (1+r)B = T'
B) G' + T' = (1 + r)B
C) G + G' = T - T'
D) B = G - T
E) G' = T' + (1 + r)B

Question

Quizplus · Accepted Answer

The government's future period budget constraint states that the present value of future government spending, G', plus the present value of future borrowing, (1+r)B, must equal the present value of future taxes, T'.

The Government's Future Period Budget Constraint Is