Suppose the Government's Budget Deficit Falls from One Year to the Next,but

question 106

Multiple Choice

Suppose the government's budget deficit falls from one year to the next,but there has been no change in the government's fiscal policy.The change in the budget deficit can be explained by

• A)a rising real interest rate.
• B)a change in the stance of fiscal policy.
• C)a rising real GDP.
• D)a rise in the cyclically adjusted deficit.
• E)a rise in the primary budget deficit.

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Definitions:

Variable

A quantity that can change or vary, often used in mathematics and statistical analysis as well as in economic models to represent changing economic indicators.

Fixed Cost

Costs that do not vary with the level of production or sales over a certain range, such as rent, salaries, and insurance.

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a product and are a significant component of its cost.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity or volume of production.