How does inclusion of the current revenues and expenditures of the Social Security trust fund into the budget calculation affect the reported budget deficit of the federal government?
a. It increases the reported deficit.
b. It reduces the reported deficit.
c. It exerts no effect on the reported deficit.
d. It increases the deficit during an economic boom but reduces it during a recession.
b
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In the Keynesian model when desired investment exceeds desired saving,
A) inventories rise. B) inventories fall. C) the price level rises. D) the price level falls.
Distinguish a direct and an inverse or negative relationship. Provide an example of each type of relationship
Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
a. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. b. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded. c. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. d. As the interest rate rises, the demand for money curve shifts outward to the right.
When a surplus exists in a market, sellers
a. raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. b. raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. c. lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. d. lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.