An Increase in the Budget Deficit Would Cause a

question 20

Multiple Choice

An increase in the budget deficit would cause a

• A)shortage of loanable funds at the original interest rate,which would lead to falling interest rates.
• B)surplus of loanable funds at the original interest rate,which would lead to rising interest rates.
• C)shortage of loanable funds at the original interest rate,which would lead to rising interest rates.
• D)surplus of loanable funds at the original interest rate,which would lead to falling interest rates.

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Definitions:

Installment Sales

Revenue recognition method allowing income to be realized at the time of sale but received through regular payments over time.

Contingent Liability

A potential financial obligation that may arise depending on the outcome of a future event.

Nontaxable Life Insurance

A type of life insurance policy where the proceeds paid on death or the cash value accumulation during the policyholder's lifetime are not subject to income taxes.

Warranty Expenses

Costs associated with the obligation to repair, replace, or remediate goods that have not met the selling criteria or customer expectations.