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If the Federal Budget Goes from a Budget Deficit in Year

question 120

Essay

If the federal budget goes from a budget deficit in Year 1 to a budget surplus in Year 2,does it follow that the federal government acted to raise taxes or cut government spending in Year 2?


Definitions:

Tax Burden

The total amount of income, property, and sales tax that an individual or corporation must pay to various government agencies.

Interest Burden

The ratio indicating the proportion of a company's pre-tax earnings that are consumed by interest payments.

Profit Margin

A financial ratio that shows what percentage of sales has turned into profits, indicating the efficiency of a company's cost management.

Accounts Payable

Accounts payable are amounts a company owes its suppliers or creditors for goods or services received that have not yet been paid for.

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