If There Was a Federal Budget Surplus and the Government

question 51

Multiple Choice

If there was a federal budget surplus and the government decided to either increase spending or decrease taxes,

• A)The budget surplus would get smaller.
• B)The budget surplus would get larger.
• C)The budget surplus would remain unchanged.
• D)None of the choices are correct.

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Definitions:

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.

Fair Value Method

An accounting approach that estimates the price of an asset or liability based on current market conditions.

Bonds

Long-term debt securities issued by corporations, municipalities, or governments that pay periodic interest payments to investors.

Fair Value

A measure of the estimated price at which an asset could be bought or sold or a liability settled, under current market conditions.