If the Government Started with a Budget Deficit and Moved

question 173

Multiple Choice

If the government started with a budget deficit and moved to a surplus, which of the following best describes the effects of these changes?

• A)Domestic investment would rise, and the trade balance would move towards surplus.
• B)Domestic investment would rise, and the trade balance would move towards deficit.
• C)Domestic investment would fall, and the trade balance would move towards surplus.
• D)Domestic investment would fall, and the trade balance would move towards deficit.

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Definitions:

Complete

Fully accomplished or having all necessary parts or steps.

Transitivity

Transitivity in decision making refers to the consistency among choices, where if option A is preferred over B and B over C, then A should be preferred over C.

Indifference Curves

Graphical representations used in microeconomics to show different combinations of two goods that give a consumer equal satisfaction and utility.

Marginal Rate

Marginal Rate often refers to the additional cost or benefit associated with a slight increase in production or activity, influencing decisions in finance and economics.