Which of the Following Is Not an Argument in Favor

question 14

Multiple Choice

Which of the following is not an argument in favor of requiring the government to balance its budget?

• A)Government debt imposes higher taxes or more borrowing on future generations.
• B)A balanced budget will smooth the business cycle.
• C)Deficits lower national saving.
• D)Recent history shows that Congress will run deficits even when deficits are not justified by war or recession.

---

Definitions:

Residual Income

A performance measure for investment centers that subtracts the opportunity cost of the investment from the income generated by the assets of the investment.

Senior Management

High-level executives responsible for the overall management and effectiveness of an organization.

Inventory Levels

The quantity of goods and materials on hand at any given time in a company.