If There Is Initially a Federal Budget Deficit, and Taxes

question 95

Multiple Choice

If there is initially a federal budget deficit, and taxes rise, while transfer payments fall:

• A)AD increases and the budget deficit increases.
• B)AD increases and the budget deficit decreases.
• C)AD decreases and the budget deficit increases.
• D)AD decreases and the budget deficit decreases.
• E)there is an indeterminate effect on both AD and the budget deficit.

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Definitions:

Referent Power

A form of influence based on identification with, adoration of, or respect for the leader or authority figure.

Centrality

The importance or influence of a node within a network, or of an individual within a social or organizational structure.

Substitutability

The extent to which one good or service can be replaced with another, indicating the ease with which products can serve as substitutes for each other.

Revenue Source

The origin or means through which an organization generates income, such as sales, subscriptions, or advertising.