When the Government Runs a Deficit, the Interest Rate Tends

question 77

Multiple Choice

When the government runs a deficit, the interest rate tends to:

• A)rise.
• B)fall.
• C)remain unchanged.
• D)rise or fall, depending on how the deficit is financed.

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Definitions:

Reaction

A process in which substances interact to form new compounds or to change their physical or chemical properties.

Boiling Point

The temperature at which a substance transitions from the liquid phase to the gas phase under standard atmospheric pressure.

Compounds

Substances formed by chemically bonding two or more elements together in definite proportions.

Compound

A material composed of at least two elements that are chemically united in a constant proportion.