Deficits Are Correlated Inversely with

question 17

Multiple Choice

Deficits are correlated inversely with

• A) the rate of growth of GDP because tax revenues climb and transfer payments contract as GDP swells.
• B) inflation because tax revenues climb and expenditures automatically fall during periods of inflation.
• C) the rate of unemployment because people who are out of work pay no tax and swell the roles of those eligible for transfer payments.
• D) interest rates because higher rates mean higher earnings on government bonds and thus more income from nontax sources.
• E) none of the above.

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Definitions:

Modify

To change or alter something, often to improve it or to adapt it to different conditions.

Cognitive Development

The process of growth and change in intellectual capabilities such as thinking, reasoning, and understanding.

Piaget's Stages

A theory by Jean Piaget that describes four stages of cognitive development in children: Sensorimotor, Preoperational, Concrete Operational, and Formal Operational stages.

Sensorimotor

Relates to the first stage of Jean Piaget’s theory of cognitive development, where infants learn through interacting with the world through sensory experiences and motor activities.