In the Short-Run Framework, Budget Deficits Should

question 94

Multiple Choice

In the short-run framework, budget deficits should:

• A)never be run since they slow economic growth over the long run.
• B)never be run since they crowd out investment in the short run.
• C)be run on a temporary basis whenever the economy is below potential output.
• D)be run on a permanent basis since they can always be financed by printing money.

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Definitions:

Hormone Theory

A concept suggesting that hormones play a central role in determining behavior and physiological processes.

Cognitive Triad Theory

A model in cognitive therapy that focuses on an individual’s negative evaluations of themselves, their world, and their future.

Biochemical Characteristics

Molecular and chemical properties of biological systems, such as enzymes, hormones, and other substances.

Cognitive Characteristics

Refers to mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.