If Government Increases the Size of Its Cyclically Adjusted Surplus

question 153

Multiple Choice

If government increases the size of its cyclically adjusted surplus, we can

• A) assume that government is causing interest rates to rise.
• B) not determine government's impact on the economy without also knowing the status of the actual budget.
• C) assume that government is having a contractionary effect on the economy.
• D) assume that government is having an expansionary effect on the economy.

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Definitions:

Dual Facilities

Dual facilities refer to the strategy of maintaining two or more locations for production, storage, or business operations to enhance capacity, flexibility, or geographic reach.

Labor Market

Refers to the supply and demand for work, in which employers seek employees, and individuals seek employment.

Production Capacity

The maximum amount of goods that can be produced or services that can be provided over a specified period under normal working conditions.

Inventory

The goods or materials that a business holds for the ultimate goal of resale, production, or utilization in operations.