Suppose the Government Implemented Cyclically Balanced Government Budgets

question 125

Multiple Choice

Suppose the government implemented cyclically balanced government budgets.Such a policy

• A)would result in larger output gaps than with annually balanced budgets.
• B)would require precise prediction of the business cycle.
• C)would eliminate the need for built-in fiscal stabilizers.
• D)is easier with frequent changes in political power.
• E)is successfully practiced in Canada.

---

Definitions:

Labour and Overhead

Combined costs associated with the workforce (labour) and indirect expenses (overhead) necessary for production but not directly tied to specific units of product.

Process Costing System

An accounting method used where production is continuous, assigning costs to units of product based on the processes they undergo.

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and cost of goods sold based on the average cost of all similar items in the inventory.

Process Costing System

An accounting method used where goods are produced in a continuous process, costs are averaged over the units produced to determine per unit cost.