What Would an Increase in the Budget Deficit Most Likely

question 138

Multiple Choice

What would an increase in the budget deficit most likely cause?

• A) a shortage of loanable funds at the original interest rate, which would lead to falling interest rates
• B) a surplus of loanable funds at the original interest rate, which would lead to rising interest rates
• C) a shortage of loanable funds at the original interest rate, which would lead to rising interest rates
• D) a surplus of loanable funds at the original interest rate, which would lead to falling interest rates

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Definitions:

Income

The financial amount earned from work (wages), capital (investments), or other revenue streams during a specific time frame.

Cafeteria Plans

Employee benefit plans that allow workers to choose from a variety of pre-tax benefits, including health insurance, retirement contributions, and flexible spending accounts.

Scholarship

A financial award given to students to support education, based on academic or other achievements, that does not require repayment.

Assistantship

A form of academic employment offered to students, typically involving teaching or research in exchange for a stipend and possibly tuition waiver.