Methods of Financing Government Spending Are Described by an Expression

question 60

Multiple Choice

Methods of financing government spending are described by an expression called the government budget constraint,which states the following

• A)the government budget deficit must equal the sum of the change in the monetary base and the change in government bonds held by the public.
• B)the government budget deficit must equal the difference between the change in the monetary base and the change in government bonds held by the public.
• C)the government budget deficit must equal the difference between the change in the monetary base and the change in government bonds held by the Fed.
• D)the government budget deficit must equal the difference between the change in the monetary base and the change in government bonds held by the Treasury.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the quantity expected, multiplied by the standard cost per unit.

Standard Quantity

The expected amount of materials or input needed to produce a unit of output.

Actual Materials

The actual amount of materials used in the production process, measured in physical units or cost.

Standard Price

A predetermined cost for a unit of material, labor, or overhead anticipated in the budgeting process, against which actual costs are compared.