A Serious Burden of a Budget Deficit and an Increase

Multiple Choice

A serious burden of a budget deficit and an increase in the national debt comes on the supply side because large budget deficits

A) discourage consumption and therefore lead to production cutbacks.
B) lead to lower interest rates and therefore to excessive optimism by consumers and businesspeople.
C) discourage investment and therefore may reduce the growth of the nation's capital stock.
D) discourage foreign investment and therefore limit employment opportunities.