Which of the Following Is Most Likely to Increase a Federal

question 84

Multiple Choice

Which of the following is most likely to increase a federal budget surplus?

• A)A higher inflation rate and a higher unemployment rate.
• B)A higher inflation rate and a lower unemployment rate.
• C)A lower inflation rate and a higher unemployment rate.
• D)A lower inflation rate and a lower unemployment rate.

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Definitions:

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged, offering a more accurate financial picture.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Cash Receipts

The total amount of cash received by a business during a specified period.

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business, used to evaluate its financial health.