An Increased Federal Budget Deficit Resulting from a Recession Can

question 43

Multiple Choice

An increased federal budget deficit resulting from a recession can actually help stabilize an economy through transfer payments because an increased budget deficit will ________ transfer payments and thereby ________ the income of some households.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease

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Definitions:

Break-even Point

The point at which total costs and total revenue are equal, meaning a business neither makes a profit nor suffers a loss.

Economic Order Quantity

A formula used in operations management for determining the optimal order size that minimizes total inventory costs.

Current Ratio

A financial metric used to assess a company's liquidity by dividing current assets by current liabilities, indicating its ability to pay short-term obligations.

Break-even Point

The break-even point is the point at which total costs equal total revenue, meaning that a business or project is neither making a profit nor suffering a loss.