When Analyzing the Effects of the Government Budget Deficit

question 41

Multiple Choice

When analyzing the effects of the government budget deficit

• A) no distinction must be made between an economy where full employment exists and one where substantial unemployment exists.
• B) it is important to examine the effects of the reported capital budget and the reported operating budget separately.
• C) there should be a comparison of the effect of the deficit to the effects of higher taxes needed to eliminate it.
• D) the baseline budget should be used since it is the most accurate.

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Definitions:

Interest Rate

The amount of money paid for the use of borrowed funds.

Legal/Regulatory

Pertaining to laws, regulations, and legal standards that govern the operations, actions, and compliance requirements of individuals and organizations.

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Competitive Advantage

A scenario or element that positions a business in a stronger or more favorable spot relative to its competitors.