Multiple Choice Question.... Which statement is a major consequence of high government budget deficits? A) All else held constant, high budget deficits financed by borrowing will lead to lower interest rates. B) If the government finances the deficit by borrowing money, it can crowd out business investment. C) Budget deficits cause unemployment as firms relocate to countries with balanced budgets. D) Printing money to finance the deficit can lead to a significantly deflationary environment.
Multiple Choice Question.... Which statement is a major consequence of high government budget deficits? A) All else held constant, high budget deficits financed by borrowing will lead to lower interest rates. B) If the government finances the deficit by borrowing money, it can crowd out business investment. C) Budget deficits cause unemployment as firms relocate to countries with balanced budgets. D) Printing money to finance the deficit can lead to a significantly deflationary environment.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Multiple Choice Question....
Which statement is a major consequence of high government budget deficits?
A) All else held constant, high budget deficits financed by borrowing will lead to lower interest rates.
B) If the government finances the deficit by borrowing money, it can crowd out business investment.
C) Budget deficits cause unemployment as firms relocate to countries with balanced budgets.
D) Printing money to finance the deficit can lead to a significantly deflationary environment.
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