In an Economy That Is Experiencing a Shrinking Production Capacity

question 92

Multiple Choice

In an economy that is experiencing a shrinking production capacity,

• A) gross domestic investment is negative.
• B) net private domestic investment is zero.
• C) depreciation is negative.
• D) depreciation exceeds gross investment.

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Definitions:

Federal Budget Deficits

The financial situation where the U.S. government's expenditures exceed its revenues within a fiscal year.

National Debt

The total amount of money that a country's government has borrowed by issuing securities, mostly through the sale of bonds.

Interest Rates

The cost of borrowing money, often expressed as a percentage of the amount borrowed.

National Debt

The complete figure representing the debt a national government holds from borrowing, which is still outstanding.