Which of the following is not a legitimate reason for maintaining federal budget deficits?
A)Deficits boost domestic saving,which in the long run could promote economic growth.
B)Deficits help reduce the size and duration of recessions through automatic stabilizers.
C)Deficits are used to finance capital projects.
D)Public spending through deficit financing wins support from the voters.
E)A federal budget deficit stimulates aggregate demand.

Question

Quizplus · Accepted Answer

Running a federal budget deficit does not boost domestic saving; in fact, it often leads to reduced national savings as the government borrows from the pool of available savings, potentially crowding out private investment.

Which of the Following Is Not a Legitimate Reason for Maintaining