Deficits May Be Desirable in the Short Run If They

question 89

Multiple Choice

Deficits may be desirable in the short run if they:

• A)help to stabilize the economy when the economy falls below potential output.
• B)increase savings necessary for future investment and growth.
• C)increase savings necessary for future consumption and demand.
• D)help to stabilize the economy when the economy is above potential output.

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Definitions:

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries.

Restrictions

Limitations or conditions placed on activities, transactions, or behaviors to regulate or control their occurrence.

Tariff

A tax imposed by a government on goods and services imported from other countries.