Higher Interest Rates Will IncreaseOttawa's BudgetDeficits, Report Warns

A University of Ottawa Institute of Fiscal Studies and Democracy report says that rising interest rates will produce larger federal government deficits.

How hasCanada's budget deficit been influenced by the Bank ofCanada's low interest rates?

The Bank ofCanada's low interest rates have madeCanada's budget deficit______ than it would have been because low interest rates______.

A.

larger;

increased transfer payments

B.

smaller;

decreased transfer payments

C.

larger;

increased government expenditure on goods and services

D.

smaller;

decreased the interest paid on the government debt