Widespread Acceptance of the Keynesian Theory of Fiscal Policy

question 127

Multiple Choice

Widespread acceptance of the Keynesian theory of fiscal policy

• A) caused most economists to reject the public choice view of budget deficits.
• B) relaxed the political pressure to balance the budget and, hence, paved the way for the persistent budget deficits of the last five decades.
• C) was based on the view that continual budget deficits would help stabilize the economy.
• D) increased the pressure for a constitutional amendment mandating that the federal government balance its budget.

---

Definitions:

Accrued Revenue

Income earned but not yet received, typically recorded with an adjusting journal entry in the accounting records.

Recorded

The act of documenting financial transactions in accounting records or journals.

Accrued Expenses

Expenses that have been incurred but not yet paid for or recorded through the issuance of cash or other payments.

Incurred

Refers to costs or expenses that have been consumed or experienced in the process of generating revenues.