When a Government Spends More Than It Collects in Taxes

question 79

Multiple Choice

When a government spends more than it collects in taxes, it runs a:

• A) trade deficit.
• B) trade surplus.
• C) budget surplus.
• D) budget deficit.

---

Definitions:

Safety Stock

Additional inventory held to protect against uncertainties in demand or supply, ensuring sufficient stock is available to meet customer needs.

Service Level

A measure of the quality of service provided, often defined as the percentage of customer demands that are met on time.

Reorder Period

The time interval between placing orders for inventory replenishment to ensure consistent supply without incurring stockouts or excessive holding costs.

Safety Stock

Inventory kept on hand to protect against fluctuations in demand or supply, ensuring that there are sufficient units available to meet customer needs.