Budgetary Deficits Always Have the Effect Of

question 105

Multiple Choice

Budgetary deficits always have the effect of:

• A)creating inflationary pressures
• B)crowding out private borrowers
• C)forcing the Federal Reserve to buy government securities
• D)creating governmental competition for private investment funds

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Definitions:

Market Efficiency

The extent to which stock prices reflect all available, relevant information, making it impossible to consistently achieve higher returns without assuming additional risk.

Selection Bias

A distortion of statistical analysis resulting from the method of collecting samples, leading to data that is not representative of the population being studied.

Magnitude Issue

Refers to the scale or size of an issue or problem, often implying its significance or impact in a particular context.

Momentum Effect

The tendency for securities that have performed well in the past to continue performing well in the future.