Which of the Following Might Be a Good Reason for Running

question 78

Multiple Choice

Which of the following might be a good reason for running a budget deficit?

• A) A budget deficit allows for consumption to be more evenly distributed over time, which can be helpful during times of recession.
• B) It puts the repayment burden on future taxpayers, who are better able to repay the accumulated debt.
• C) It is better than increasing taxes, because budget deficits do not have to be repaid.
• D) It allows for the expansion of entitlement programs to cover more people, thus reducing their financial burdens.
• E) There is never a good reason for running a budget deficit.

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Definitions:

Days' Sales Uncollected

A financial metric indicating the average number of days it takes a company to collect payment after a sale has been made, used as an indicator of the efficiency of a company's credit and collection policies.

Financial Information

Data regarding the financial performance, condition, and cash flow of an entity, used by stakeholders to make economic decisions.

Whirlpool Company

An American multinational manufacturer and marketer of home appliances.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects debts from its customers, calculated by dividing total net sales by the average accounts receivable.