Question

2 multiple choice 1 point
(14 n, o)
which of the following best describes the relationship between a budget deficit and the national debt?
every year of budget deficits adds to the national debt.
the deficit is a shortfall of cash, while the debt is a loan to cover it.
budget deficit and national debt are the same thing.
ongoing debt increases the deficit in each years budget.
3 multiple choice 1 point
(13 j, m, n)
what causes cost-push (aggregate supply) inflation?
a fall in the price of imports.
a decrease in supply.
an increase in demand for goods and services.
a rise in production cost passed on to consumers.

Explanation:

For question 2: A budget deficit occurs when government spending exceeds revenue in a single year, and each annual deficit is added to the total accumulated amount owed by the government, which is the national debt. The other options are incorrect: deficits are annual shortfalls, not covered by a single loan; they are not the same as the total national debt; and debt does not directly cause annual deficits (deficits cause increases in debt).
For question 3: Cost-push inflation originates from increases in the costs of production (such as labor, raw materials). When these costs rise, producers pass them on to consumers in the form of higher prices, leading to inflation. A fall in import prices would reduce costs, a supply decrease alone is too vague, and increased demand causes demand-pull inflation, not cost-push.

Answer:

1. Every year of budget deficits adds to the national debt.
2. A rise in production cost passed on to consumers.