Asked by
Amanda Chester
on Dec 16, 2024Verified
Which of the following is not a legitimate reason for maintaining federal budget deficits?
A) Deficits boost domestic saving,which in the long run could promote economic growth.
B) Deficits help reduce the size and duration of recessions through automatic stabilizers.
C) Deficits are used to finance capital projects.
D) Public spending through deficit financing wins support from the voters.
E) A federal budget deficit stimulates aggregate demand.
Automatic Stabilizers
Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to help stabilize an economy during fluctuations.
Federal Budget Deficits
Occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings.
Aggregate Demand
The overall requirement for goods and services across an economy, evaluated at one price level and over a specified duration.
- Apprehend how monetary strategies affect the budgetary deficit and the sum of national debt.
Verified Answer
MT
Learning Objectives
- Apprehend how monetary strategies affect the budgetary deficit and the sum of national debt.