If the United States Ran Large Budget Deficits That Push

Multiple Choice

If the United States ran large budget deficits that push the federal debt to dangerously high levels, which of the following would be most likely to occur?

A) An increase in investor confidence,  an inflow of capital, and expansion in the size of the trade deficit.
B) Loss of investor confidence, a decline in the net inflow of capital, and shrinkage in the trade deficit.
C) An increase in the attractiveness of investments in the United States, an increase in the inflow of capital, and a smaller trade deficit.
D) An increase in the long-term growth rate of the U.S. economy.