It May Be Necessary to Cut the Deficit as Part

question 51

Multiple Choice

It may be necessary to cut the deficit as part of a credible anti-inflationary policy because the public knows that large deficits ________.

• A) are inflationary by themselves in the long run
• B) create inefficiencies
• C) put pressure on the Bank of Canada to expand the money supply to keep interest rates from rising
• D) put pressure on the Bank of Canada to contract the money supply to prevent employment from rising

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Definitions:

Consultant

A professional who provides expert advice in a particular area or industry.

Round Trip

A journey to a destination and back to the original starting point, usually referring to travel.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating its sensitivity to price changes.

Total Revenue

The total receipts from sales of goods or services over a specific period before any expenses are deducted.