The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city

Which of the following correctly describes a way in which deficit spending can impose a burden on future generations?

I. Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt. II. Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits. III. Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed. A) I only B) II only C) I and III only D) II and III only

If reserves held at the Fed by the private banks decrease, ________

A) the nominal interest rate will decrease B) banks will make more loans C) demand for labor will increase D) bank deposits will decrease