The Sharp Rise in the Debt-To-GDP Ratio in 2008-2009

question 79

Multiple Choice

The sharp rise in the debt-to-GDP ratio in 2008-2009

• A) was exclusively automatic due to the effect of declining income on government outlays and tax revenues.
• B) was exclusively due to an aggressive fiscal policy.
• C) was exclusively due to military expenditures.
• D) was partly automatic due to the effect of declining income on government outlays and tax revenues,and partly due to an aggressive fiscal policy.
• E) was exclusively due to foreign aid expenditures.

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Definitions:

Original Cost

The initial monetary value of an asset or investment, reflecting the purchase price or production cost before adjustments like depreciation or amortization.

Gain on Sale

Profit realized from the sale of assets or investments when the selling price exceeds the book value.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is becoming the global standard for the preparation of public company financial statements.