Which of the Following Is the Largest Category of Federal

question 25

Multiple Choice

Which of the following is the largest category of federal government expenditures?

• A)health care spending
• B)transfer payments to individuals
• C)interest on government debt
• D)grants to provincial and local governments
• E)military spending

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Definitions:

Fixed

Costs or expenses that do not change with the level of production or sales activity, such as rent or salaries.

Committed Fixed Costs

Investments in facilities, equipment, and basic organizational structure that can’t be significantly reduced even for short periods of time without making fundamental changes.

Short Term

A time period typically lasting less than one year, used to evaluate financial performance, investments, and objectives that are expected to be achieved within a brief timeframe.

Step-Variable Cost

A cost that remains constant for a certain level of activity, but changes in step fashion once a certain threshold is surpassed.