Which of the Following Best Describes Most Economists' Approach to Economic

question 62

Multiple Choice

Which of the following best describes most economists' approach to economic stabilization until the 1930s?

• A)Maintain a balanced budget at all times, under the principle of sound finance.
• B)Use a sound finance approach during normal economic times, and a functional finance approach during a recession or a boom.
• C)Run larger deficits during recessions and smaller deficits during economic booms, counting on economic growth to be high enough to keep the debt-to-GDP ratio low.
• D)Economists were wholly concerned with microeconomics and had ignored problems of government deficits, debt, recessions, and economic growth.

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Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm's financial condition.

Sales On Account

Sales made to customers for which payment is to be made in the future.

Cost Of Goods Sold

The direct expenses related to the manufacturing of products sold by a company, encompassing both materials and labor costs.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from credit sales by comparing net credit sales with the average accounts receivable.