If the Federal Budget Is Initially Balanced and Government Expenditures

question 105

Multiple Choice

If the federal budget is initially balanced and government expenditures remain constant, then an Jincrease in GDP will _________ tax revenues and create a budget _________.

• A) increase tax revenues and create a budget surplus.
• B) increase tax revenues and create a budget deficit.
• C) decrease tax revenues and create a budget surplus.
• D) decrease tax revenues and create a budget deficit.

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Definitions:

Direct Materials Purchases

The total amount of raw materials bought by a company for use in production during a specific accounting period.

Material B

A generic term often used to denote a specific type of material used in the manufacturing or production process.

Budgeted Total Sales

The estimated total revenue that a business plans to generate from goods or services sold within a specific period.

Sales Estimates

Projections or predictions about the amount of revenue that will be generated through sales activities within a certain period.