What Is the Most Appropriate Way to Compare Budget Deficits/surpluses

question 151

Multiple Choice

What is the most appropriate way to compare budget deficits/surpluses across time?

• A) using nominal dollar figures
• B) using real dollar figures
• C) calculating figures as a portion of gross domestic product (GDP)
• D) using per capita dollar figures
• E) Budget figures cannot be compared across time.

---

Definitions:

Federal Funds Market

A financial market that allows banks to borrow or lend excess reserves to one another, typically overnight, at an interest rate called the federal funds rate.

Discount Window

A monetary policy tool used by central banks, providing short-term loans to commercial banks to help them meet reserve requirements or alleviate liquidity shortages.

Reserve Deficiency

A situation in which a bank does not have enough reserves to meet the central bank's requirements.

Federal Reserve Districts

Geographic regions in the United States, each with a specifically designated Federal Reserve Bank, responsible for implementing the nation's monetary policy.