If the Government Is Currently Running an Overall Budget Deficit

question 117

Multiple Choice

If the government is currently running an overall budget deficit, when inflation is rising and unemployment is low, then the cyclically adjusted budget deficit should indicate:

• A) a contractionary fiscal stance.
• B) an expansionary fiscal stance.
• C) a neutral stance.
• D) a lower domestic deficit.

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Definitions:

Paid Cash

A transaction in which goods or services are paid for using physical money or through immediate electronic funds transfer, as opposed to using credit.

Placed on Account

Transactions recorded on credit, affecting accounts payable or receivable without immediate cash exchange.

Debit Balance

A condition where the sum of debits in an account exceeds the sum of credits, indicating an expenditure or asset.

Credit Balance

A situation where the total credits in an account exceed the total debits, often reflecting a positive balance in financial accounts.