U.S. posts largest-ever monthly budget deficit in February The budget gap widened to $234 billion in February, compared with a gap of $215.2 billion a year earlier and surpassed the monthly record of $231.7 billion set seven years ago. Source: Bloomberg, March 22, 2019 Explain the effect of a large federal deficit and debt on economic growth. Question content area bottom Part 1 A large federal deficit and debt _______. A. lowers the real interest rate, which encourages private investment, discourages saving, and increases labor productivity B. encourages private investment, which increases the growth of capital stock and real GDP C. slows the growth of capital stock and labor productivity, and slows real GDP growth D. encourages private saving, which lowers the real interest rate and increases the growth of capital stock