If the Full-Employment Budget Surplus Is Positive but the Actual

question 19

Multiple Choice

If the full-employment budget surplus is positive but the actual budget surplus is negative, what can we conclude?

• A)nothing
• B)that saving exceeds investment
• C)that the economy is in a boom
• D)that fiscal policy is too restrictive
• E)that fiscal policy is too expansionary

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Definitions:

Liability

Financial obligations or debts that an entity owes to another party, which need to be settled over time through the transfer of economic benefits including money, goods, or services.

Adjusting Entry

An adjusting entry, in accounting, is utilized to update the records for expenses and revenues that have accrued but not yet been recorded in the general ledger by the end of an accounting period.

Accumulated Depreciation

The cumulative amount of depreciation expense recorded for fixed assets over their useful lives, reflecting the decline in the assets' value from wear and tear or obsolescence.

Depreciation Expense

The allocated amount of an asset's cost that is expensed during a given period, reflecting the asset's consumption or loss of value.