Which of the Following Statements Is False

question 60

Multiple Choice

Which of the following statements is false?

• A) The federal budget deficit in 2004 was about 4 percent of the GDP.
• B) A budget deficit of $25 billion in a given year increases the public debt by $25 billion.
• C) The public debt of $25 billion is the accumulated debt of all U.S. individuals, firms, and institutions.
• D) During the past five years, the U.S. public debt has been increasing.

---

Definitions:

Deferred Tax Assets

Financial items on a company's balance sheet that can be used to reduce future tax liability.

Deferred Tax Liabilities

Future tax liabilities arising from temporary differences between the book value and the tax basis of assets and liabilities.

Book Income Tax Expense

The amount of income tax expense that is reported in the financial statements, which may differ from actual taxes paid due to timing or differences in accounting and tax rules.

Deferred Tax Assets

Financial items on a company's balance sheet representing taxes paid or carried forward but not yet realized in the income statement.