If the United States Continues to Run Large Structural Deficits

question 42

Multiple Choice

If the United States continues to run large structural deficits year after year, the government will have to

• A) borrow money to finance them.
• B) also run a trade deficit.
• C) raise interest rates to prevent the deflation that accompanies the deficits.
• D) deregulate financial institutions to accommodate the deficits.

---

Definitions:

Pollutants

Substances or objects that cause pollution, negatively affecting air, water, or soil quality.

Marginal Benefit

The additional satisfaction or utility gained by consuming one more unit of a good or service.

Marginal Private Cost

The additional cost incurred by a producer or a consumer for producing or consuming one more unit of a good, excluding any external costs.

Marginal External Cost

The additional cost society bears due to one more unit of a good or service being produced, not included in the producer's cost.