In Addition to Annually and Cyclically Balanced Budget Policies,a Third

question 24

Multiple Choice

In addition to annually and cyclically balanced budget policies,a third approach argues that the government's budget should be

• A) set to promote the preferred combination of unemployment and inflation.
• B) balanced over the course of the business cycle.
• C) measured in current rather than constant dollars to accurately reflect the magnitude of fiscal stimulus.
• D) designed to ensure persistent surpluses to reduce unemployment.
• E) using the tax laws to stimulate investment.

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Definitions:

Permanent Accounts

Accounts on the balance sheet whose balances are carried over into the next accounting period.

Post-closing Trial Balance

A list of all company accounts that remain after adjusting entries and closing entries have been made, used to test the balance of debits and credits.

Asset Accounts

Accounts on a balance sheet representing resources owned or controlled by a company with future economic value.

Liability Accounts

Accounts that represent amounts owed to creditors or bills that must be paid in the future, contributing to a company’s liabilities on the balance sheet.