Asked by
alana fields
on Nov 11, 2024
Verified
Which of the following statements is true?
A) Federal budget deficits became progressively smaller during the 1990s and turned into a surplus by 1998.
B) Federal spending declined relative to GDP,while federal revenues rose relative to GDP during the 1980s.
C) Functional finance says that policy makers should be concerned less with the economy's potential output and more with balancing the budget annually.
D) A disadvantage of functional finance is that it increases the level of unemployment during recessions.
E) A disadvantage of annual financed budget is that it dampens swings in the business cycle without increasing the national debt.
Federal Budget Deficits
The fiscal situation where the government's expenditures surpass its revenues in a given fiscal year.
Federal Spending
Expenditures by the federal government on goods, services, and obligations, including defense, welfare, and interest on the debt.
Functional Finance
A theory that government budgetary policy should primarily focus on ensuring economic stability and stimulating demand to achieve full employment, rather than solely aiming to balance budgets.
- Absorb the information on the causes of federal deficits and their impact on the Gross Domestic Product in the U.S.
- Identify the political and economic challenges in managing federal budget deficits.
Verified Answer
TH
Learning Objectives
- Absorb the information on the causes of federal deficits and their impact on the Gross Domestic Product in the U.S.
- Identify the political and economic challenges in managing federal budget deficits.