If there is initially a federal budget deficit, and government purchases and transfer payments both rise:
a. AD increases and the budget deficit increases.
b. AD increases and the budget deficit decreases.
c. AD decreases and the budget deficit increases.
d. AD decreases and the budget deficit decreases.
a
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Which of the following describes the difference between "scarcity" and "shortage"?
A) There is no difference; either word can be used to describe the situation that exists when there is less of a good or service available than people want. B) There is a shortage of almost everything. Scarcity occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price. C) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price. D) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the equilibrium price.
The fact that the balance of trade normally falls before increasing after a devaluation is known as
A) the J-curve. B) the pass-through effect. C) the balance of payments paradox. D) the indifference reflection.