Explain how deficit spending could be a burden to future generations
What will be an ideal response?
Deficit spending can lead to two negative effects. First, future generations will have higher taxes to pay off the debt. Second, current consumption crowds out investment, and reduces the growth of capital goods leaving future generations with a reduced capital stock.
Economics
You might also like to view...
Scarcity can be eliminated by
A) abolishing competition. B) abolishing capitalism. C) abolishing money. D) all of the above. E) none of the above.
Economics
Suppose you are an advisor to the Business Cycle Dating Committee. You are asked to look at macroeconomic data to evaluate whether the economy has entered a recession this year. Which data do you look at? How does the economy behave at the onset of a
recession? What will be an ideal response?
Economics