An Increase in the Structural Deficit Most Likely Reflects the Fact

question 43

Multiple Choice

An increase in the structural deficit most likely reflects the fact that fiscal policy is

• A) having little or no impact on the economy.
• B) effectively reducing the size of the national debt.
• C) becoming more expansionary.
• D) creating a substantial gap between potential and full-employment GDP.
• E) causing the price level to fall.

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Definitions:

Sundry Account

An account used to record minor or infrequent transactions not fitting into other specific account categories.

Tickler File

An organizational system used to remind a person of tasks that need to be done at specific future dates.

Unpaid Vouchers

Refers to vouchers, which represent obligations or promises to pay, that have not yet been settled or paid.

Gross Method

An accounting method for recording purchases of inventory at their full invoice prices without deducting any cash discounts offered.