If There Is an Increase in the Government Budget Deficit

question 151

Multiple Choice

If there is an increase in the government budget deficit, the _____ loanable funds will _____, interest rates will _____, and the amount of borrowing will _____.

• A) demand for; increase; increase; increase
• B) demand for; decrease; decrease; decrease
• C) supply of; increase; decrease; increase
• D) supply of; decrease; increase; decrease

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used as a measure of the company's worth on its balance sheet.

Partial Equity Method

An accounting approach where an investor recognizes income from an investee to the extent of dividends received and changes in the investee's equity.

Consolidated Net Income

The total net earnings of a parent company and its subsidiaries after eliminating inter-company transactions and distributions.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.