The Nominal Deficit Depends Primarily On

question 150

Multiple Choice

The nominal deficit depends primarily on:

• A)government's expenditures and receipts.
• B)the rate of inflation.
• C)the difference between potential and actual output.
• D)the debt.

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Definitions:

Liquidity Preference Theory

is the hypothesis that investors prefer to have liquid rather than illiquid assets and will demand higher yields for longer-term securities that are less liquid.

Aggregate Demand Curve

A graph showing the total demand for goods and services within an economy at different price levels.

Aggregate Demand

The total demand for all goods and services within an economy at various price levels, over a specific time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time.