The Downward-Sloping Line in the Diagram Below Shows the Combinations

question 76

Multiple Choice

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1-6
-Refer to Figure 1-6.The levels of health and education expenditures at point C

• A)are less than at point D.
• B)are equal to those of point A and point B.
• C)are more cost-effective than those at points A,B,and D.
• D)could be achieved if the prices of health and/or education increased.
• E)are not attainable with the government's current budget.

---

Definitions:

Annual Net Cash Flows

The total amount of money, including inflows minus outflows, that a business generates over one year.

Expected Total Cash Flows

The projection of all the cash that is anticipated to be received or paid out over a certain period of time in the future.

Cash Payback Period

The time period required for the returns from an investment to repay the initial capital outlay.

Annual Net Cash Flows

This term refers to the amount of money that flows in and out of a business over a year after all expenses have been accounted for.