Question #17

The comment that budget deficits lead to higher taxation is

• generally true if the deficit stimulates output but doesn't mean current individual tax burdens are higher.
• generally false because in the case of sovereign governments because they do not need to raise taxes to finance spending.
• generally true because revenue has to be raised ultimately to pay for the deficit spending and that requires individual tax burdens to rise.

Answer #119

Answer: generally true if the deficit stimulates output but doesn't mean current individual tax burdens are higher.

Explanation

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