________ Refers to a Situation Where a Government Does Not

question 41

Multiple Choice

________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

• A) Fair trade
• B) Trade theory
• C) Free trade
• D) Mercantilism

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Definitions:

Cyclically Balanced

A fiscal policy strategy where government budgets are planned to balance over the business cycle, running surpluses in boom years and deficits during recessions.

Federal Deficits

The financial shortfall that occurs when a government's expenditures exceed its revenues in a given fiscal year.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by devastating economic contraction, high unemployment, and deflation.

Welfare Outlays

Expenditures made by governments aimed at supporting the wellbeing of citizens, including benefits for the unemployed, poor, disabled and elderly.