A Simultaneous Increase of Government Purchases by $50 Billion and a Tax

question 121

True/False

A simultaneous increase of government purchases by $50 billion and a tax hike of $50 billion should stimulate the economy by $50 billion.

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Definitions:

Internal Control Procedures

Systems and policies put in place by a company to ensure the accuracy and integrity of financial and accounting information, prevent fraud, and comply with laws.

Cash Receipts

Money received by a business during a set accounting period, including revenue from sales, interest, dividends, and other cash inflows.

Voucher System

A control mechanism in accounting to ensure all business transactions are properly authorized and recorded.

Liabilities

A company's legal financial debts or obligations that arise during the course of business operations, to be settled over time through the transfer of economic benefits including money, goods, or services.