Which of the Following Is an Accurate Statement About the Relative

question 2

Multiple Choice

Which of the following is an accurate statement about the relative size of government purchases and government spending?

• A) Because spending is the same as purchasing, the measures must be the same.
• B) Purchases will be greater than spending because of deficit and surplus adjustments.
• C) Spending includes transfer payments like social security, but purchases do not.
• D) Neither includes provision of government services by contract with private firms.

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Definitions:

Short-term Incentive

Compensation awarded to motivate and reward employees for achieving specific performance targets within a short period, typically one year.

Compliance Covenant

A clause in a financial agreement that requires a borrower to meet certain conditions to maintain good standing with the lender.

Net Worth

The total assets minus total liabilities of an individual or company, indicating the financial health or value of the entity.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.