In the Short Run,a Federal Budget Deficit Will Most Likely

question 53

Multiple Choice

In the short run,a federal budget deficit will most likely _____.

• A)stimulate aggregate supply
• B)reduce federal debt
• C)boost economic growth
• D)reduce national saving
• E)boost domestic saving

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Definitions:

Federal Budget Deficit

The financial situation where the government's expenditures exceed its revenues in a given fiscal year, leading to borrowing.

Fiscal Year

Budget year. U.S. federal budget fiscal year begins on October 1.

Automatic Stabilizers

Economic policies and programs, like unemployment benefits and progressive taxation, that automatically help stabilize economic fluctuations without direct governmental intervention.

Economic Recovery

A period of increasing business activity signaling the end of a recession, marked by a rise in GDP, employment, and consumer spending.