Consider the Government's Budget Deficit Function Over a Two-Year Time

question 34

Multiple Choice

Consider the government's budget deficit function over a two-year time span - Years 1 and 2.Suppose in Year 2 there was a lower federal budget deficit than in Year 1.This could be explained by ________ in Year 2.

• A)higher government expenditures (with constant real GDP)
• B)higher real GDP (with constant fiscal policy)
• C)lower real GDP (with constant fiscal policy)
• D)a higher stock of government debt
• E)an upward shift of the budget deficit function

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Definitions:

Closing Entries

Closing entries are journal entries made at the end of an accounting period to transfer temporary accounts to permanent accounts, preparing the books for the next period.

Worksheet Income Statement

is a financial statement that preliminarily combines income and expenses data in worksheet form to calculate net income or loss.

Normal Balance

The part of an account (either debit or credit) that is used to log increments in the account's value.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, including balance sheets, income statements, and statements of cash flows.