A Constitutional Amendment Is Passed That Requires the Government to Have

question 33

Multiple Choice

A constitutional amendment is passed that requires the government to have an annually balanced budget in the sense that changes in spending should be matched by equivalent changes in taxes.Should the government desire to increase GDP by $25 billion and meet the provisions of the law, it

• A)cannot possibly reach its objective without breaking the law.
• B)could increase spending by $25 billion and reduce taxes by $25 billion.
• C)could increase spending by $25 billion and increase taxes by $25 billion.
• D)could increase spending by $30 billion and increase taxes by $25 billion.

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Definitions:

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and infrequency, reported separately in financial statements for clearer analysis.

Earnings Per Share

A measure of a company's profitability that calculates how much money shareholders would receive for each share they own if all of the profits were distributed to them.

Component of the Business

A segment or section of a company that can be identified operationally and for financial reporting, often seen as a distinct part of the business that could be separated or sold.

Extraordinary Item

A term previously used in accounting for events and transactions that were both unusual in nature and infrequent, which is no longer preferred under most financial reporting frameworks.