The two ways in which deficit spending can impose a burden on future generations are
A) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods.
B) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital.
C) by substituting private goods for public goods and thereby shifting resources to foreign residents.
D) by substituting private goods for public goods and thereby benefiting only large businesses.

Question

Quizplus · Accepted Answer

Deficit spending requires borrowing, which creates a debt that future generations will have to pay off with higher taxes. This reduces their disposable income and potentially limits their ability to accumulate capital goods. Additionally, if the deficit spending is not used to promote long-term economic growth, it may not generate enough revenue to pay off the debt, further burdening future generations.

The Two Ways in Which Deficit Spending Can Impose a Burden