If the Economy's Full-Employment Output Is $9 Trillion, Actual Output

question 316

Multiple Choice

If the economy's full-employment output is $9 trillion, actual output is $9 trillion, and the budget deficit is $20 billion, the deficit in this case is known as a

• A) natural employment deficit.
• B) cyclical deficit.
• C) structural deficit.
• D) fiscal deficit.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated as the difference between the present value of cash inflows and outflows over a period.

Monthly Interest Rate

The fraction of the annual interest rate divided by twelve, representing the interest for a single month.

Credit Policy

A credit policy is a set of guidelines that a company follows to determine the credit terms and conditions for its customers, including payment terms, credit limits, and how to manage delinquent accounts.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.