If Other Factors Are Held Constant, What Happens When the Federal

question 100

Multiple Choice

If other factors are held constant, what happens when the federal government finances a growing budget deficit by increasing the amount it borrows from the private sector?

• A)There will be an increase in the interest rate.
• B)There will be a decrease in the interest rate.
• C)The crowding out effect will be cancelled out.
• D)There will be an increase in net exports.

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Definitions:

Initiating Structure

Leadership behavior focused on defining roles, setting goals, and providing clear direction to team members.

Consideration

The degree of empathy, respect, and understanding a leader or organization shows towards its members.

Precondition

A condition that must be met or required before another event or operation can occur.

Initiating Structure

A leadership behavior that focuses on defining roles, tasks, and relationships in the pursuit of goal achievement.