20) The negative impact of government debt on the economy is mitigated by ______

ID: 1099075 • Letter: 2

Question

20) The negative impact of government debt on the economy is mitigated by ________.

A) the impact of the debt on national saving.

B) government spending on schools and highways.

C) the interest rate effects of government budget deficits.

D) the phenomenon of crowding-out.

21) The phenomenon of crowding-out suggests that the positive impact of budget deficits on economic activity are reduced by ________.

A) the impact produced by government spending on the environment.

B) an increase in national savings.

C) the interest rate effects associated with federal deficits.

D) the increase in pork barrel projects deficit spending entails.

22) The policy of keeping tax rates stable as government spending fluctuates is known as ________.

A) Ricardian equivalence.

B) tax smoothing.

C) crowding-out.

D) a tax smoothie.

20)D) the phenomenon of crowding-out.

21)C) the interest rate effects associated with federal deficits.

22)B) tax smoothing.

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