Which List Contains Only Things That Decrease When the Budget

question 48

Multiple Choice

Which list contains only things that decrease when the budget deficit of the Canadian government increases?

• A) Canadian net exports, national saving, and net capital outflow
• B) Canadian supply of loanable funds, the real exchange rate of the dollar, and domestic investment
• C) Canadian imports, interest rates, and the real exchange rate of the dollar
• D) interest rate, net exports, and the quantity demanded for loanable funds for domestic investment

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Definitions:

Long-run Equilibrium

A state in an economy or market where all factors of production and economic variables are balanced, and there are no external pressures forcing change.

MR = MC

The condition under which profit is maximized, where marginal revenue equals marginal cost.

P > MC

Indicates a situation where the price of a good is greater than the marginal cost of producing it, suggesting a potential for profit.

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, leading to some degree of market power but still allowing for competition.