Which of the Following Is NOT True Regarding Budgeting Rules

question 38

Multiple Choice

Which of the following is NOT true regarding budgeting rules?

• A)Some balanced budget rules have weak provisions for enforcement.
• B)Tough budgeting rules do not prevent deficits when they are combined with limits on government borrowing.
• C)Rules that simply require a budget to be balanced may be less effective than rules that require a budget to be balanced at the end of the fiscal year.
• D)Some budgeting rules regulating long-term capital borrowing do not necessarily lead to less state indebtedness.

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Definitions:

Legally Sufficient Value

A value, consideration, or benefit that is recognized by law as adequate to support a binding contract.

Preexisting Duty

An obligation or duty that already exists under a contract, and performing it, therefore, does not constitute consideration for a new promise.

Law

Rules devised and applied by institutions of society or the government to modulate behavior.

Legally Sufficient Value

An acceptable form or measure of value that must be provided in a contract to make it binding and enforceable under law.