Economists in Favor of the Functional Finance Approach to Balancing

question 131

True/False

Economists in favor of the functional finance approach to balancing the federal budget believe that the first priority of lawmakers is to keep the economy at full employment with stable prices, and not to balance the federal budget.

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Definitions:

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Statement of Cash Flows

A financial report summarizing the amount of cash and cash equivalents entering and leaving a company.

Operating Activities

Business transactions and events related to the primary revenue-generating activities of an organization, influencing cash flow.