If Current Savings Increases the Same Amount as the Federal

question 54

Multiple Choice

If current savings increases the same amount as the federal stimulus,

• A) the budget deficit will not increase.
• B) the effects of the stimulus are negated.
• C) the government will continue to conduct fiscal policy.
• D) consumption must also increase.
• E) the effects of the stimulus are multiplied.

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Definitions:

Journal Entries

Records of financial transactions in the double-entry bookkeeping system, showing debits and credits made in accounts to maintain the ledger.

Available-For-Sale Investments

Financial assets not classified as held-to-maturity or trading securities, which can be sold in the financial markets.

Unrealized Gain

The increase in the value of an investment that has not been sold yet, and thus, the gain is not yet realized as actual income.

Adjusting Entry

An accounting transaction recorded at the end of a financial period to adjust account balances in the ledgers.