The long-run effect of higher government budget deficits on the equilibrium annu

Question

The long-run effect of higher government budget deficits on the equilibrium annual flow of real GDP is zero. Who, therefore, benefits in the long run from higher government deficits? Those who benefit in the long run from higher budget deficits are A B. C. D. ose w o receive the sma er share ofthe annua ow of real G to government pro 1 ed goods ar service t ose w o receive the larger share ofthe annual ow of real D ) t government-provi ed goods and services those who receive the larger share of the annual ow of real GDP to government provided goods and services those who receive the sma er share of the annual ow of real GD to government provide goods and services- atis hose to whom these goods and services are redistributed. at is no e to whom these o sand services are redis tributed a s ose to to eseg s an services are noted ute at i nose on these goods and se n ces re not edi t but d

Explanation / Answer

2. The correct answer is: B)

Reason: It is clearly mentioned that the long-term effect of higher government deficit on annual flow of GDP is zero I.e. higher Government deficit has no impact on the annual flow of GDP, thus those who receive the redistributed goods and services are more benefited.

P.S.: As per Chegg's policy if nothing is mentioned then only the first question is to be answered.

Thanks!

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