The 2008-2009 Global Recession Had an Effect on Canadian Federal

question 89

Multiple Choice

The 2008-2009 global recession had an effect on Canadian federal and provincial budgets.In general,government debt-to-GDP ratios rose in Canada because of

• A)contractionary monetary policy and expansionary fiscal policy.
• B)an increased burden of debt-service payments due to the necessary reduction in the target overnight interest rate by the central bank.
• C)the decline in net tax revenues due to the recession,as well an expansionary fiscal policy.
• D)the necessity to balance the primary budget at the same time that the interest rate on government debt was rising.
• E)the necessity to balance the cyclically adjusted budget at the same time that the interest rate on government debt was rising.

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Definitions:

Salaries Payable

A liability account that records the amounts owed to employees for work performed but not yet paid.

Social Security Tax

A mandatory contribution paid by employees and employers to fund the social security program, providing benefits for retirement, disability, and survivors.

Payroll of Scotland Company

The total amount of wages and salaries paid by Scotland Company to its employees.

Total Payroll Tax

The combined amount of all governmental taxes that an employer is required to withhold and/or pay on behalf of their employees, including federal, state, and local taxes.