If the United States Increased Its Budget Deficit, and It

question 207

Multiple Choice

If the United States increased its budget deficit, and it is at or near full employment, the most likely effect is to crowd

• A)in investment and crowd out net exports.
• B)out investment and crowd in net exports.
• C)in investment and crowd in net exports.
• D)out investment and crowd out net exports.

Recognize the importance of essential attributes in definitions.

Understand the concept of counterexamples in evaluating definitions.

Identify and avoid circular definitions.

Recognize the significance of specificity and accuracy in definitions.

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Definitions:

Corporate Bond Fund

A corporate bond fund is an investment fund that focuses on investing in the corporate debt securities of varying credit ratings and maturities.

Equal Annual Installments

A repayment structure where the borrower pays back a loan in fixed amounts each year until the full amount is repaid.

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, so the balance doesn't merely grow, it grows at an increasing rate.

Interest

Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.