If the Federal Budget Is Initially Balanced and Government Expenditures

question 83

Multiple Choice

If the federal budget is initially balanced and government expenditures remain constant, then a
Decrease in GDP will

• A) decrease tax revenues and create a budget surplus.
• B) increase tax revenues and create a budget surplus.
• C) decrease tax revenues and create a budget deficit.
• D) increase tax revenues and create a budget deficit.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Consolidated Balance Sheet

A financial statement that aggregates the assets, liabilities, and equity of a parent company and its subsidiaries into one document.

Acquisition Date

The specific date on which an acquisition, purchase, or investment transaction is completed or finalized.

Net Assets

The total assets of an entity minus its total liabilities, indicating the entity's net worth or equity value.