In 2011,Country a Has Net Taxes of $30 Million and Government

question 21

Multiple Choice

In 2011,Country A has net taxes of $30 million and government expenditures of $35 million.Private saving in Country A is $5 million and consumption expenditure is $80 million.The government of Country A is running a budget ________ and national saving is ________.

• A)surplus;$5 million
• B)deficit;-$5 million
• C)deficit;$5 million
• D)surplus;$25 million
• E)deficit;zero

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Definitions:

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements to combine the financial information of a parent company with its subsidiaries.

Subsidiary Entity

An entity that is controlled by another entity, the control often being evidenced through ownership of more than half of the voting rights or through other means of control.

Consolidation Adjustment

Adjustments made to eliminate intercompany transactions and balances during the preparation of consolidated financial statements for a group of companies.

Inventories

Goods or materials that a business holds for the purpose of sale or production.