Suppose the Government Deficit Increases,but the Interest Rate Remains the Same.Which

question 31

Multiple Choice

Suppose the government deficit increases,but the interest rate remains the same.Which of the following things might have happened simultaneously to keep interest rates the same?

• A)The government reduces the amount that people may put into savings accounts on which the interest is tax exempt.
• B)Because they are optimistic about the future of the economy,firms desire to borrow more to purchase physical capital.
• C)Consumers decide to decrease consumption and work more.
• D)All of the above could explain why the interest rate would be unchanged.

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Mission

The fundamental purpose or objective of an organization, clearly stating its reasons for existence and guiding its strategies and actions.

Business Incubator

A facility that offers space, shared services, and advice to help get small businesses started.

Limited Liability Corporation

A corporate framework that merges the direct taxation benefit of sole proprietorships or partnerships with the corporation's advantage of limited liability.

Partnership

A legal and business relationship between two or more people who collaborate and share the responsibilities, profits, and losses of running an enterprise.