Which of the Following Statements Is True

question 92

Multiple Choice

Which of the following statements is true?

• A) When an economy operates at the full employment level, it is at a point above its production possibility frontier.
• B) Government de?cits tend to increase during recessions.
• C) An economy that is booming is at its full employment level.
• D) As economies boom, tax receipts fall and government spending increases.

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Definitions:

Adjusting Entries

Entries in accounting journals, made at the termination of an accounting cycle, serve to apportion incomes and outlays to their actual occurrence period.

Unearned Revenue

Money received by an entity for a service not yet performed or a product not yet delivered. It is recorded as a liability until the service or product is delivered.

Net Income

The total profit or loss of a company after all revenues, expenses, and taxes have been accounted for.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life.