What Happens When the Government Attempts to Cut the Economic

question 45

Multiple Choice

What happens when the government attempts to cut the economic pie into more equal slices?

• A) It is easier to cut the pie, and therefore the economy can produce a larger pie.
• B) The government can more easily allocate the pie to those most in need.
• C) The pie gets smaller, and there will be less pie for everyone.
• D) The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone.

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Definitions:

Debt

An amount of money borrowed by one party from another, often with the agreement that it will be paid back with interest.

Equity

Ownership interest in an asset after deducting all debts associated with that asset, highlighting a financial stake in a company or property.

Credit Score

A numerical expression based on an analysis of a person's credit files, representing the creditworthiness of an individual.

Business Loan

Financing that businesses seek and receive to help with expenses, growth, or other financial needs, typically from a banking institution or lender.