High Income Countries with Larger Governments as a Share of GDP

question 72

Multiple Choice

High income countries with larger governments as a share of GDP have generally

• A) grown less rapidly than their counterparts with smaller governments.
• B) experienced less deadweight losses resulting from taxes and/or government borrowing.
• C) seen the government decrease in size as real GDP rises.
• D) been able to be more economically efficient.

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Definitions:

Debt-to-equity Ratio

A financial indicator showing how much of a company's assets are financed by debt compared to shareholders' equity.

Receivable Turnover

A financial ratio that measures how efficiently a company collects its outstanding credit sales, typically calculated annually.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating efficiency in managing and selling stock.

Acid-test Ratio

A stringent test that measures the liquidity of a company by comparing its most liquid assets (excluding inventory) against its short-term liabilities.