Which of the Following Is True of an Annually Balanced

question 22

Multiple Choice

Which of the following is true of an annually balanced federal budget?

• A)Most economists agree that the federal government should balance its budget just as each household does.
• B)Such a policy would require the government to increase its spending when tax receipts decrease.
• C)Such a policy became popular between the 1930s and 1960s.
• D)Such a policy guarantees that the economy is its potential level.
• E)Such a policy could worsen a contractionary gap.

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Definitions:

Romanesque

An architectural style of Europe characterized by semi-circular arches, robust appearance, and thick walls, prevalent in the 11th and 12th centuries.

Material

The substance or substances of which any physical object is composed or can be made, including metals, woods, plastics, and textiles.

Location

A specific place or position, often used in various contexts to define where something is situated or found.

Moral Hazard

A situation in which one party is more willing to take risks because the costs that may result will not be borne by them.