Graph 13-2 -In Graph 13-2, an Increase in the Government Budget Deficit

question 19

Multiple Choice

Graph 13-2
-In Graph 13-2, an increase in the government budget deficit causes the equilibrium interest rate to:

• A)be unchanged
• B)increase from r₁ to r₂ in panel (a)
• C)increase from E₁ to E₂ in panel (c)
• D)decrease from r₂ to r₁ in panel (a)
• E)both B and C

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Definitions:

Subsidiary Ledger

A detailed ledger that contains detailed financial information associated with specific accounts, which is summarized in the general ledger.

General Ledger

A comprehensive set of accounts that records all transactions of a company, categorized into assets, liabilities, equity, revenue, and expenses.

Sales Return

Goods returned by the customer to the seller for a refund or credit due to reasons like defects or dissatisfaction.

General Journal

A comprehensive ledger that records all the day-to-day financial transactions of a business.