Proper Inflation Accounting Is Necessary to Measure the Size of the Real

question 62

Multiple Choice

Proper inflation accounting is necessary to measure the size of the real deficit because

• A)as a lender, the government gains from inflation.
• B)otherwise, the deficit is understated in inflationary times.
• C)the government is a borrower that pays back dollars of less real value in inflationary times.
• D)interest payments tend to fall in inflationary times.

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Definitions:

Conflicting Feelings

Emotional experiences that are at odds with each other, often causing confusion or distress.

Characteristic Pattern

A consistent and observable behavior or feature repeated in a similar way across different contexts or situations.

Personality

The blend of features that constitute a person's individual identity.

Reality Principle

The reality principle is a psychoanalytic concept that describes the ego's role in mediating between the desires of the id and the constraints of the external world.