Which of the Following Statements Concerning a Budget Deficit Is

question 10

Multiple Choice

Which of the following statements concerning a budget deficit is true?

• A)It is smaller if the economy is in the midst of a severe recession.
• B)It is smaller if the economy is experiencing strong aggregate demand.
• C)It reduces the size of the national debt.
• D)It can be measured in terms of the amount of unemployment that it causes.

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Definitions:

Consumer Goods

Products produced for purchase by individuals and households for personal use, such as clothing, food, and electronics.

Industrialize

The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods.

Market-Oriented Economy

An economy in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Reforms

Changes made to improve a system, law, institution, or practice that are often enacted in response to instances of inefficiency or injustice.