Public choice analysis indicates that elected political officials will find debt financing
a. unattractive because voters will recognize that excessive debt will lead to the future collapse of the economy.
b. attractive because countries with a higher debt to GDP ratio generally grow more rapidly.
c. unattractive because both politicians and voters will recognize that a larger outstanding debt will mean higher future taxes.
d. attractive because current spending can provide voters with highly visible goods, services, and transfer payments, while borrowing will push the most visible cost of this spending into the future.
D
You might also like to view...
Assuming government's goal is to benefit society as much as possible:
A. actions with negative and positive externalities should be encouraged. B. actions with negative externalities should be restricted and actions with positive externalities should be encouraged. C. actions with negative and positive externalities should be restricted. D. actions with negative externalities should be encouraged and actions with positive externalities should be restricted.
Which of the following is the best example of a supply-side market failure?
A) No one provides street lights in a town because, once the lights are in operation, people don't have to pay to use them. B) Street performers don't get full payment for the value of their output because people watch and enjoy the shows without paying the artist. C) Government imposes taxes on the production of a socially desirable good. D) A firm keeps its production costs down by dumping its waste in the nearby river, adversely affecting water quality for residents in the area.