As a Result of the Increased Deficit Associated with Discretionary

question 94

Multiple Choice

As a result of the increased deficit associated with discretionary fiscal policy,_____.

• A)both the interest rate and real output fall
• B)both the interest rate and nominal output rise
• C)the interest rate falls and real output rises
• D)the interest rate rises and real output falls
• E)nominal output rises,real output falls,and the interest rate rises

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Definitions:

Future Value

The value of an investment or sum of money at a specified date in the future, taking into account interest or capital gains.

Ordinary Annuity

A series of equal payments made at fixed intervals over a specified period.

Ordinary Annuities

A sequence of identical payments distributed at the conclusion of successive intervals during a predetermined duration.

Annuities Due

Annuities that require payment at the beginning of each period, as opposed to the end, used often in leases and loan repayments.