Question

What would be the long-term implications of the government implementing expansionary fiscal policies indefinitely?(1 point) Responses Decreases in federal government revenue and increasing expenses cause large deficits and add to the national debt, straining the economy. Decreases in federal government revenue and increasing expenses cause large deficits and add to the national debt, straining the economy. Increases to the corporate income tax rate lead to faster economic growth and drive inflation upwards. Increases to the corporate income tax rate lead to faster economic growth and drive inflation upwards. Individual and corporate tax rates decrease along with spending for social programs, both of which would lead the economy to slow down or contract. Individual and corporate tax rates decrease along with spending for social programs, both of which would lead the economy to slow down or contract. Higher individual and corporate tax rates and greater government spending limit growth of the private sector economy.

Answer 1

[AI-generated answer — Bot GPT 3.5]

Higher deficits and national debt could lead to decreased confidence in the government's ability to manage the economy, potentially resulting in higher interest rates and reduced investment. This could ultimately lead to inflation, currency instability, and a decline in overall economic growth. Additionally, over-reliance on expansionary fiscal policies could limit the government's ability to respond effectively to future economic crises or emergencies.