Which of the Following Would Decrease the Size of a Federal

question 70

Multiple Choice

Which of the following would decrease the size of a federal budget deficit?​

• A)A recession
• B)An increase in defense spending
• C)An increase in the use of automatic stabilizers
• D)An increase in taxes
• E)An increase in transfer payments

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Definitions:

Price Mechanism

The method through which changes in supply and demand cause prices to increase or decrease, directing how resources are distributed in a market-based economy.

Market Failure

An instance where goods and services are distributed by an unregulated market in a manner that is not optimum, frequently causing a reduction in the total wellbeing of society.

Public Sector

The part of an economy that is controlled by the government, including public services and enterprises.

Capitalist Societies

Social systems that rely on private ownership of the means of production and operate on profit and market competition.