The Leakage and Injections Approach Implies That Deficit Spending by the Government

question 61

Multiple Choice

The leakage and injections approach implies that deficit spending by the government must be financed by

• A)private investment less private savings plus net exports.
• B)private saving less private investment plus net exports.
• C)the trade deficit must always offset the government deficit.
• D)B and C.

---

Definitions:

Equivalent Units

A method used in cost accounting to allocate costs to partially completed goods, calculated as the number of complete units that could have been produced with the amount of work done.

Conversion Costs

refer to the combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished products.

Production Data

Information related to the manufacturing process, including quantities produced, machine hours used, and raw materials consumed.

Equivalent Units

A concept in process costing that converts partially completed units into a number of fully completed units for accounting purposes.