If a Deficit Is Financed by Issuing New Money, The

question 175

Multiple Choice

If a deficit is financed by issuing new money, the:

• A)government is using its accumulated surplus to issue the new money.
• B)government will be competing with private borrowers for funds.
• C)increased demand for funds will drive up the interest rate.
• D)crowding-out of investment can probably be avoided.

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Definitions:

Theory-Theory

The idea that children naturally construct theories about the world as a way of understanding it, similar to how scientists form theories to explain their observations.

Deductive Reasoning

The operation of inferring a conclusion by the congruity of numerous statements regarded as accurate.

Conservation

A principle in cognitive development theory stating that physical quantities remain constant in spite of changes in their shape or appearance.

Scaffolding

An educational technique where a teacher adjusts the level of support provided to the student in the learning process, based on the student's performance.