What Would an Increase in the Budget Deficit Most Likely

question 138

Multiple Choice

What would an increase in the budget deficit most likely cause?

• A) a shortage of loanable funds at the original interest rate, which would lead to falling interest rates
• B) a surplus of loanable funds at the original interest rate, which would lead to rising interest rates
• C) a shortage of loanable funds at the original interest rate, which would lead to rising interest rates
• D) a surplus of loanable funds at the original interest rate, which would lead to falling interest rates

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Definitions:

Denial

A psychological defense mechanism involving refusal to accept reality or facts, therefore avoiding dealing with painful feelings.

Repression

A defense mechanism where unpleasant thoughts, memories, or desires are excluded from conscious awareness.

Projection

A defense mechanism where one attributes their own unwanted emotions or traits to other people.

Critical

Relating to the analysis, assessment, or evaluation of something with a focus on its merits, faults, and value.