A Higher Deficit in the Current Year Will Lead to Increased

question 30

Multiple Choice

A higher deficit in the current year will lead to increased debt in the future only if

• A)the deficit is greater than the previous year's deficit.
• B)the deficit-to-GDP ratio is greater than the debt-to-GDP ratio.
• C)it causes a drop in private saving.
• D)it causes an increase in private saving.
• E) none of the above

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Definitions:

Constant

A quality, value, or quantity that remains unchanged or stable within a given context or over time.

Non-Experimental

Research methods that do not involve manipulating variables to determine effects but instead observe naturally occurring relationships.

Experimental

Pertaining to a method of research that involves the manipulation of variables to establish cause and effect relationships.

Correlational

Relating to a statistical relationship between two or more variables, where changes in one variable are associated with changes in another, without implying causation.