If the US Inflation Rate Increases Unexpectedly and Government Revenues, Expenditures, and Expenditures

question 112

Multiple Choice

If the U.S. inflation rate increases unexpectedly and government revenues, expenditures, and nominal interest rates remain unchanged:

• A)both the U.S real and nominal budget deficits increases.
• B)only the U.S. real budget deficit increases.
• C)only the U.S. real budget deficit decreases.
• D)both the U.S. real and nominal budget deficits decreases.

---

Definitions:

Effective

The degree to which something achieves its intended result, outcome, or goal with a minimum of wasted effort or expense.

Prescriptive Theories

Prescriptive theories offer specific recommendations or guidelines for actions, aiming to produce desired outcomes based on established principles or empirical findings.

Particular Type

A specific category or class with distinct characteristics that distinguish it from others.

Necessary Conditions

Necessary conditions are requirements or prerequisites that must be met for a certain event to occur or for a certain statement to be true, without which the event or statement cannot materialize.