If a Government Increases Its Budget Deficit, Which Statement Would

question 22

Multiple Choice

If a government increases its budget deficit, which statement would best predict the effects?

• A) Interest rates rise, and the trade balance moves toward surplus.
• B) Interest rates rise, and the trade balance moves toward deficit.
• C) Interest rates fall, and the trade balance moves toward surplus.
• D) Interest rates fall, and the trade balance moves toward deficit.

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Definitions:

Adjusted Value

A modification of financial or numerical data to account for changes or for better comparison, often used in accounting and finance.

Explained Variation

The portion of the total variation in a dataset that is accounted for by the model's predictor variables.

Independent Variables

Variables in a statistical or mathematical model that are manipulated or have their values set externally to observe or measure their effect on dependent variables.

Degrees of Freedom

The number of independent values or quantities which can vary in the calculation of a statistic.