Why Is a Budget Surplus Not Necessarily a Good Thing

question 77

Multiple Choice

Why is a budget surplus not necessarily a good thing?

• A) Saving money is not something a government should do.
• B) It demonstrates a society that is too weak to stand up to the government.
• C) It means the government thinks a recession is coming,so it is storing funds for the crisis.
• D) The surplus money is divided among members of Congress,as a reward for managing the economy well.
• E) It means tax rates may be too high.

---

Definitions:

Activity-Based Costing

A method of allocating overhead and indirect costs to specific products or projects based on their use of resources.

Activity Rate

The cost driver rate that is used to assign activity costs to products or services based on their consumption of the activity.

Cost Pools

Groups of individual costs combined to allocate costs more efficiently.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming for more accurate product costing.