Suppose That in Fiscal Year 2015 the Government Ran a Deficit

question 1

Multiple Choice

Suppose that in fiscal year 2015 the government ran a deficit of about $249 billion.The debt at the start of this period was about $5971 billion.Which of the following combinations of inflation and real GDP would have allowed the government to run a deficit this large without raising the debt-to-income ratio?

• A) inflation = 2 percent; real GDP growth = 3 percent
• B) inflation = 3 percent; real GDP growth = -1.5 percent
• C) inflation = 3 percent; real GDP growth = 1 percent
• D) inflation = 1.5 percent; real GDP growth = 1 percent

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Definitions:

Sensation

The physical response of sensory receptors when a stimulus is detected (e.g., activity of the sensory receptors in the eye in response to light); awareness of stimuli in the senses.

Perception

The mental processing of sensory information, which is interpreted as sight, sound, and smell, for example.

Locomotion

The capability to transition between locations, encompassing activities such as walking, running, swimming, or flying.

Visually Tracking

The ability to follow the movement of an object with one's eyes, which is important for various cognitive and physical tasks.