The Government's Present Value Budget Constraint States That

Multiple Choice

The government's present value budget constraint states that

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