Scenario 18-3

question 308

Multiple Choice

Scenario 18-3.Assume the following information for an imaginary,open economy.
Consumption = $1,000; investment = $300; net exports = $100;
taxes = $230; private saving = $200; and national saving = $150.
-Refer to Scenario 18-3.This economy's government is running a

• A) budget deficit of $50.
• B) budget deficit of $80.
• C) budget surplus of $50.
• D) budget surplus of $80.

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction.

Completed Contract Method

An accounting technique used to defer all revenue, expense, and profit recognition until a contract is completed.

Accounting

The systematic recording, reporting, and analysis of financial transactions of a business.

Installment Sales

A sales method allowing customers to make payments over a period of time until the full price is paid.