Author Question: The deficit (as a fraction of GDP) is anticipated to rise over the next several decades due to ... (Read 55 times)

dejastew · **on:** Jun 30, 2018

The deficit (as a fraction of GDP) is anticipated to rise over the next several decades due to projections of

A) increased defense spending.
B) increased spending on entitlements.
C) increased inflation.
D) decreased corporate tax revenues.
E) decreased income tax revenues.

Question 2

A major reason to be concerned about any U.S. budget deficit is that

A) if it were maintained, it would lead to an ever-increasing debt-to-GDP ratio.
B) it would exacerbate the problem of the low U.S. saving rate.
C) under current legislation, it would lead to budget surpluses in the future.
D) if it were to increase, Ricardian equivalence will no longer hold.
E) since large deficits are associated with wars, the deficit might encourage the U.S. to become more adventuristic in its foreign policy.