A Budget Surplus Is Created When the Government

question 55

Multiple Choice

A budget surplus is created when the government:

• A)spends more than it receives in tax revenue
• B)buys back more bonds than it issues
• C)receives more tax revenue than it spends
• D)raises interest rates

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

ABC

A method of identifying and assigning costs to specific activities to improve cost accuracy and managerial decision-making.

Special Materials

Materials that are uncommon, difficult to procure, or used in specialized applications.

Activity-Based Costing

An accounting method that assigns costs to products and services based on the resources they consume and the activities they require.