When the Government Runs a Budget Deficit, What Is Most

question 83

Multiple Choice

When the government runs a budget deficit, what is most likely to happen?

• A) Interest rates become lower than they would be otherwise.
• B) National saving gets higher than it would be otherwise.
• C) Investment gets lower than it would be otherwise.
• D) Government debt decreases by the amount of the deficit.

---

Definitions:

GAAP Conservatism

An accounting principle that entails erring on the side of caution, providing for potential losses or liabilities.

R&D

Research and Development; activities undertaken by a business to innovate and introduce new products or services.

Software Development

The process of conceiving, specifying, designing, programming, documenting, testing, and bug fixing involved in creating and maintaining applications, frameworks, or other software components.

Intangible Assets

Assets that lack physical substance, such as patents, trademarks, and goodwill.