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Author Question: Why don't governments avoid budget deficits under all ... (Read 66 times)

olgavictoria

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on: Jun 30, 2018
Why don't governments avoid budget deficits under all circumstances?

Question 2

The rate of interest that the Federal Reserve charges on loans to member banks is the:
 a. open market rate.
  b. federal funds rate.
  c. discount rate.
  d. prime interest rate.
  e. reserve lending rate.


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ong527

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Budget deficits can be important because they provide the federal government with the flexibility to respond appropriately to changing economic circumstances. The government may run deficits during special emergencies. The government may also use a budget deficit to avert an economic downturn.

Answer to Question 2

c


olgavictoria

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Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

Laurenleakan

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Reply 3 on: Yesterday
Wow, this really help

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