If a Government Has a Budget Deficit, It Must

question 39

Multiple Choice

If a government has a budget deficit, it must

• A) borrow in the loanable funds market.
• B) increase taxes.
• C) lower the real interest rate.
• D) decrease its expenditures.
• E) decrease taxes.

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Definitions:

Gastrulation

An initial stage in the embryonic growth of many animals, where the blastula, which originally has a single layer, transforms into a gastrula, a structure with multiple layers.

Organogenesis

The process in embryonic development during which the organs are formed from the three germ layers.

Expulsion

The process of driving or forcing out something or someone.

Product Transformation Curve

A graphical representation showing the maximum number of two goods or services that an economy can produce with available resources and technology, demonstrating the trade-offs and opportunity costs.