If the Level of Government Expenditures Is Given, Budget Surpluses

question 81

True/False

If the level of government expenditures is given, budget surpluses and deficits depend on tax revenues, which tend to vary directly with GDP.

---

Definitions:

Amortization Expense

The process of allocating the cost of an intangible asset over its useful life for accounting and tax purposes.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends, accumulated over the company’s life.

Beginning Period

This refers to the starting point or the first date of a financial reporting period.