The Government's Present Value Budget Constraint States That

Multiple Choice

The government's present value budget constraint states that

A) the government may run deficits each and every year, as long as the deficits are sufficiently small.
B) the present value of government spending must be equal to the present value of consumers' disposable incomes.
C) governments can increase spending as long as deficits are financed by issuing debt.
D) the present value of government spending must be equal to the present value of taxes.
E) taxes must equal government spending in each period.