If the Government's Expenditures Exceeded Its Receipts, It Would Likely

question 165

Multiple Choice

If the government's expenditures exceeded its receipts, it would likely

• A)lend money to a bank or other financial intermediary.
• B)borrow money from a bank or other financial intermediary.
• C)buy bonds directly from the public.
• D)sell bonds directly to the public.

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Definitions:

Inflation Rate

The Inflation Rate is a measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, usually expressed as a percentage.

Shoeleather Costs

The increased costs of transactions caused by inflation, including the time and effort spent to avoid holding cash that is rapidly losing value.

Menu Costs

The expenses companies incur while changing their prices, including costs related to reprinting menus, updating marketing materials, and altering price tags.

Saving Distortions

Alterations in the savings behavior of individuals or institutions due to external influences, such as tax policies or inflation.