When the Budget Is Balanced in Nominal Terms and Inflation

question 13

Multiple Choice

When the budget is balanced in nominal terms and inflation is positive,

• A) monetary policy must have been expansionary.
• B) the budget in real terms is also in balance.
• C) the budget in real terms is in surplus.
• D) the budget in real terms is in deficit.
• E) a and b.

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Definitions:

Net Operating Income

The profit a company makes after deducting operating expenses but before interest and taxes.

Operating Loss

A situation where a company's total operating expenses exceed its total revenue, indicating a deficit in its core business operations.

Variable Costing

A cost accounting method that only includes variable production costs in the cost of goods sold, excluding fixed manufacturing overhead.

Net Operating Income

A measure of a company's profitability, calculated as the difference between its total revenue and its total operating expenses, excluding taxes and interest.