An increase in budget deficit typically leads to an increase in national debt as the government borrows more.

Higher than expected inflation decreases purchasing power as prices rise faster than income.

With a 5% inflation rate, a $100 product will cost $100 + ($100 * 0.05) = $105 after one year.

A budget surplus indicates that revenue exceeds expenditure, allowing for savings or debt reduction.

A high inflation rate typically indicates decreased purchasing power, as consumers can buy less with the same amount of money.

GDP stands for Gross Domestic Product, which measures the economic performance of a country.

GDP stands for Gross Domestic Product, which measures the economic performance of a country.

A budget deficit occurs when expenses exceed revenue, indicating that the government is spending more than it earns.

High inflation typically decreases the real value of savings, discouraging saving behavior.

The primary goal of a government budget is to allocate resources effectively to meet the needs of the economy and its citizens.

The primary purpose of a national budget is to allocate resources effectively across various sectors.

The term for a sustained increase in the general price level is inflation.

The Consumer Price Index (CPI) is commonly used to measure inflation by tracking changes in the price level of a basket of consumer goods and services.

All of the options listed can contribute to inflation, including increased demand, decreased supply, and increased production costs.

Stable GDP growth is an indicator of a healthy economy, reflecting consistent economic activity.

All of the options listed are components of GDP, which includes consumption, investment, and government spending.

All of the above methods can be used to calculate GDP.

Taxation is not a direct component of GDP; it is a means of revenue for the government.

The consumption approach is not a recognized method to calculate GDP; the three main methods are production, income, and expenditure approaches.