Why Are Deficits Undesirable

question 8

Multiple Choice

Why are deficits undesirable?

• A) They reduce future output.
• B) They reduce future consumption.
• C) They increase inflation.
• D) They increase unemployment.

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Definitions:

Dominates

A condition or situation where one option is better than another in all aspects or circumstances.

Pure Monopoly

An economic situation where only one supplier dominates the entire market offering for a specific commodity or service, with no nearly identical alternatives available.

Price Maker

A firm with the power to influence the price at which it sells its product, typically because it does not face significant competition.

Purely Monopolistic

A market structure where a single supplier has exclusive control over the production and sale of a unique product without close substitutes, leading to significant market power.