If the Federal Government Runs a Budget Deficit,but the Budget

question 7

Multiple Choice

If the federal government runs a budget deficit,but the budget deficit as a percent of GDP is less than the growth rate of real output,the

• A)national debt will decrease as a share of GDP.
• B)national debt will remain a constant share of GDP.
• C)national debt will increase as a share of GDP.
• D)size of the national debt (in dollar value)will decline.

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Definitions:

Total Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.

Maximize Profits

The process of making the highest possible profit from business operations.

Relatively Inelastic

Describes a situation where the demand or supply of a good or service changes minimally in response to changes in price.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good changes as production volume increases.