Question

A functional finance economist would say do nothing if: A. the budget was balanced, economic growth was 1%, and inflation was 3%. B. the federal surplus was $1 trillion, economic growth was 1%, and inflation was 3%. C. the federal deficit was $1 trillion, economic growth was 4%, and inflation was zero. D. the federal deficit was $1 trillion, economic growth was 4%, and inflation was 10%.

Answer 1

The correct answer from the provided options is C

Step-by-step explanation:

A federal deficit is when government spending is greater than the revenue collected. Economic growth refers to an increase in the inflation-adjusted market value of the goods and services produced by an economy over time. Inflation is a measure of the rate at which the average price level of goods and services in an economy increases over a period of time.

A functional finance economist would say do nothing if the federal deficit was $1 trillion, economic growth was 4%, and inflation was zero.