The Cyclical Deficit

question 114

Multiple Choice

The cyclical deficit:

• A)is not affected by changes in actual income or potential income.
• B)rises as the economy expands and falls as the economy contracts.
• C)is the deficit that exists if the economy is at potential income.
• D)rises as the economy moves below potential output.

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Definitions:

Buyer's Expense

Buyer's expense refers to costs that the purchaser of goods or services is required to pay, outside of the purchase price, such as shipping or taxes.

Conditional Contracts

Agreements that become enforceable only upon the occurrence of specified conditions.

Sale-On-Approval Contracts

Contracts that allow buyers to take possession of goods before deciding whether to complete the purchase, often used in sales where inspection is necessary.

Condition-Or-Sale Contracts

Agreements that stipulate the sale of goods is dependent on certain conditions being met, often used to protect the interests of the seller.