One of the Long-Run Effects of Higher Government Budget Deficits

Multiple Choice

One of the long-run effects of higher government budget deficits is

A) a redistribution of real Gross Domestic Product (GDP) away from government-provided goods and toward more privately provided goods.
B) an increase in the government's share of the nation's economic activity.
C) growth in the economy's private sector at the same time the government sector shrinks.
D) a fall in the equilibrium price level.