When Are Budget Deficits Created

question 54

Multiple Choice

When are budget deficits created?

• A)when interest on government debt is increasing
• B)when government tax revenues exceeds its spending
• C)when government spending equals its tax revenues
• D)when government spending exceeds its tax revenues

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Definitions:

Information Ratio

A measure of a portfolio manager's performance and ability to generate excess returns relative to a benchmark, considering the volatility of those returns.

Residual Standard Deviation

This is a measure used in statistics to estimate the standard deviation of the residuals (errors) from a regression line, indicating how well the model fits the data.

Beta

A measure of a security's volatility in relation to the overall market; used as a gauge of its risk.

T-Bills

Short-term government securities issued at a discount from par value and maturing at face value, providing a return in the form of the difference between the purchase price and the maturity value.