Suppose the Government Deficit Increases,but the Interest Rate Remains the Same.Which

question 31

Multiple Choice

Suppose the government deficit increases,but the interest rate remains the same.Which of the following things might have happened simultaneously to keep interest rates the same?

• A)The government reduces the amount that people may put into savings accounts on which the interest is tax exempt.
• B)Because they are optimistic about the future of the economy,firms desire to borrow more to purchase physical capital.
• C)Consumers decide to decrease consumption and work more.
• D)All of the above could explain why the interest rate would be unchanged.

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Definitions:

Human Error

Mistakes made by individuals, often leading to accidents or failures in tasks or operations.

Audits

Independent examinations of financial records and statements by a third party to ensure accuracy and compliance with accounting principles.

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The process by which company managers formally attest to the accuracy and completeness of the financial statements.

Sarbanes-Oxley (SOX)

A U.S. federal law enacted to protect investors by improving the accuracy and reliability of corporate disclosures, enhancing financial reporting and corporate governance.