If Current Savings Increases the Same Amount as the Federal

question 54

Multiple Choice

If current savings increases the same amount as the federal stimulus,

• A) the budget deficit will not increase.
• B) the effects of the stimulus are negated.
• C) the government will continue to conduct fiscal policy.
• D) consumption must also increase.
• E) the effects of the stimulus are multiplied.

---

Definitions:

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Financial Risk

The possibility of losing money on an investment or business venture.

ROE

Return on Equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.