A Higher Deficit in the Current Year Will Lead to Increased

question 30

Multiple Choice

A higher deficit in the current year will lead to increased debt in the future only if

• A)the deficit is greater than the previous year's deficit.
• B)the deficit-to-GDP ratio is greater than the debt-to-GDP ratio.
• C)it causes a drop in private saving.
• D)it causes an increase in private saving.
• E) none of the above

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Definitions:

Efficiency

The ratio of the output gained from a system to the input used, often used to evaluate the performance of a business operation or machine.

Standard Price

A pre-determined cost that is often used in budgeting and financial planning, serving as a benchmark for performance evaluation.

Direct Materials

Materials that become an integral part of a finished product and whose costs can be conveniently traced to it.

Final, Delivered Cost

The comprehensive cost of a good or service including its production, logistics, and any other costs until its delivery to the final consumer.