What Approach to Federal Finance Would You Agree with If

question 135

Multiple Choice

What approach to federal finance would you agree with if you wanted the federal government to restrict spending or raise taxes during booms and use surpluses from the booms to offset deficits during recessions?

• A) annually balanced budget
• B) cyclically balanced budget
• C) functional finance
• D) trade balanced budget

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, according to the rules of double-entry accounting.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.

Credit

An arrangement whereby goods, services, or money is received in exchange for a promise to pay back a definite sum of money at a future date.

Supplies

Items used in the operations of a business, often consumable, such as office supplies or factory supplies, not directly part of the finished product.