Refer to the Data in the Table

question 307

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Actual Budget Deficit (-) or } \\\text { Surplus (+) }\end{array} & \begin{array} { c } \text { Cyclically Adjusted Deficit (-) or Surplus } \\( + ) \end{array} \\\hline 1 & + 1.4 \% & + 0.1 \% \\\hline 2 & + 2.5 & + 1.1 \\\hline 3 & + 1.3 & + 1.1 \\\hline 4 & - 1.5 & - 1.1 \\\hline 5 & - 3.4 & - 2.7 \\\hline 6 & - 3.5 & - 2.4 \\\hline 7 & - 2.6 & - 1.8 \\\hline 8 & - 1.9 & - 1.8 \\\hline 9 & - 1.3 & - 1.4 \\\hline\end{array}$$ Refer to the data in the table. The direction of ?scal policy became more contractionary from

• A) Year 7 to 8.
• B) Year 3 to 4.
• C) Year 4 to 5.
• D) Year 5 to 6.

---

Definitions:

Prepaid Expenses

Costs incurred before receiving goods or services that are expected to be provided later.

Accounts Receivable

Funds that are due to a company from its customers for goods or services that have been delivered or sold but not yet paid for.

Inventories

are the raw materials, work-in-progress products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Operating Expense

Operating expense refers to the costs associated with the day-to-day operations of a business, excluding direct production costs.