Consider the Government's Budget Constraint

question 96

Multiple Choice

Consider the government's budget constraint.The accumulated stock of government debt will begin to fall

• A)if the government's debt-service payments are zero.
• B)if the government does not borrow money.
• C)if the growth rate of real GDP is higher than the real interest rate.
• D)when the government's annual budget is in deficit.
• E)when the government's annual budget is in surplus.

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Definitions:

Income

The monetary gain received from work (wages or salary), capital, or other sources during a specific period of time.

Quintile Distribution

Quintile distribution is a method of dividing a population into five equal groups or quintiles, based on variables such as income or wealth, to analyze economic inequality.

Income Receivers

Individuals or entities that earn income through various means such as employment, investments, or ownership of assets.

Gini Ratios

A gauge of how evenly income is distributed across a population, with a scale from 0 indicating absolute equality to 1 showing total inequality.