In Order for the Government to Sustain a Primary Deficit

question 66

Multiple Choice

In order for the government to sustain a primary deficit forever,

• A) real GDP must grow faster than the real interest rate.
• B) real GDP must grow slower than the real interest rate.
• C) it must borrow from other governments.
• D) it must eventually lend to other governments.
• E) real GDP must grow at the same rate as the real interest rate.

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Definitions:

Job-Order Costing

An accounting method that tracks costs individually for each job, suitable for manufacturing jobs that are distinct and not identical.

Indirect Labor

Labor costs associated with support work that cannot be directly linked to the production of goods or services, such as maintenance and supervision.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.

Work in Process

Inventory that includes goods in the process of being manufactured but are not yet completed.