Question #73

The government deficits may ultimately lead to higher tax rates being imposed

• because ultimately, whether we like it or not, the public debt has to be paid back.
• if nominal demand increases too fast in relation to the real capacity levels.
• because the government will need more money to continue spending.

Answer #710

Answer: if nominal demand increases too fast in relation to the real capacity levels.

Explanation

Please read The budget deficits will increase taxation! for more information or post a comment if you are unsure.