Why Are Deficits Undesirable

question 116

Multiple Choice

Why are deficits undesirable?

• A)They reduce private savings.
• B)If deficits accumulate, people consume at the expense of their children.
• C)They lead to high inflation.
• D)They increase unemployment.

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Definitions:

Simple Rate

A basic or straightforward interest rate that does not take into account the effect of compounding.

Annual Incremental

Relates to the yearly increase or addition in terms of quantity, size, rate, or level of company metrics or budgets.

Net Operating Income

A company's revenue minus its operating expenses, excluding taxes and interest.

Initial Investment

Initial investment is the initial amount of money spent to start a project, purchase an asset, or embark on a new business venture.