Which of the Following Statements Is True

question 70

Multiple Choice

Which of the following statements is true?

• A) Controlling the growth of the supply of money will only have predictable effects on interest rates if the growth in the demand for money is unpredictable.
• B) Volatile interest rates can be detrimental to economic growth.
• C) Interest rates can become volatile because the demand for money is controlled.
• D) Interest rates can become volatile because the supply for money is fluctuating.

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Definitions:

Government Borrowing

The act of governments raising funds through the issuance of securities or bonds to finance public expenditure, leading to government debt.

Personal Income Taxes

Taxes imposed on individuals' income by the government, including wages, salaries, and investment earnings.

Federal Tax Revenues

The income earned by the government through all types of taxes, including income, payroll, and excise taxes, used to fund public services and operations.

Tax Freedom Day

A symbolic day representing when a nation's taxpayers have collectively earned enough income to pay the year's total tax bill.