If a State's National Budget Is in Surplus, Which of the Following

question 54

Multiple Choice

If a state's national budget is in surplus, which of the following is true?

• A) The government is spending more in the economy than it is taking out of the economy in taxes and revenues.
• B) The government is taking more out of the economy in taxes and revenues than it is spending in the economy.
• C) The government is spending about the same in the economy as it is taking out of the economy in taxes and revenues.
• D) The government is spending less in the economy than it is taking out of the economy in taxes and revenues.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with the level of activity but having a portion that remains constant.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Cost

Expenses that do not change with the level of production or sales over the short term, such as rent, salaries, and insurance.

Period Cost

An expense that is not directly tied to the production process but rather incurred over a specific time period.