Which Factor Would Enhance the Government's Ability to Keep Deficits

question 36

Multiple Choice

Which factor would enhance the government's ability to keep deficits and the national debt under control over the long term?

• A) The cost of Social Security changes as baby boomers age.
• B) The cost of Medicare changes as health care costs increase.
• C) The Fed continues to keep interest rates low.
• D) Foreigners become unwilling to hold dollars.

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Definitions:

Soccer Tournament

A competitive series of soccer games where teams compete to determine a champion.

Real Exchange Rate

The rate at which two currencies can be exchanged after adjusting for inflation differentials, reflecting the purchasing power of one currency in terms of goods and services.

Domestic Goods

Products that are manufactured within a country's borders, as opposed to goods imported from other countries.

Foreign Goods

Products that are produced in one country and then imported and sold in another country.