According to the Traditional View of Government Debt, If Taxes

question 45

Multiple Choice

According to the traditional view of government debt, if taxes are cut without cutting government spending, then the international effect initially will be a capital ______ and a trade ______.

• A) inflow; deficit
• B) inflow; surplus
• C) outflow; deficit
• D) outflow; surplus

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

Yen

The official currency of Japan, often represented by the symbol ¥.

Below-Average Sensitivity

A term often used in finance to describe investments that react less than proportionally to changes in market conditions, such as interest rates or stock prices.

Economy

The large system that encompasses all activities related to the production, consumption, and distribution of goods and services in a geographic region.