When the Government Runs a Deficit It Must

question 2

Multiple Choice

When the government runs a deficit it must:

• A)buy bonds to finance the deficit.
• B)sell bonds to finance the deficit.
• C)decrease the money supply to finance the deficit.
• D)raise taxes immediately.

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Definitions:

Monarchy

A form of government in which a single person, the monarch, rules until death or abdication, and the position is usually inherited.

Communist

Pertaining to a political and economic system aiming for a classless society in which all property is publicly owned and each person works and is paid according to their abilities and needs.

Socialist

Pertaining to a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

Anarchic

Characterized by a lack of structured government or authority, often leading to disorder and confusion.