Budgets Are Generally Regarded as Having Several Areas of Usefulness

question 66

Multiple Choice

Budgets are generally regarded as having several areas of usefulness. Which of these is not one of them?

• A)They can facilitate control within the business.
• B)They tend to promote forward thinking.
• C)They help coordinate the various sectors of the business.
• D)They can be used to allocate direct expenses.

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way, typically with only natural unemployment remaining.

Marginal Propensity

Measures the portion of additional income that an individual or entity spends on consuming goods rather than saving.

Multiplier

The ratio of the change in an endogenous variable to the change in an exogenous variable it is dependent on, often used in the context of fiscal policy’s effect on the economy.

MPC

Stands for Marginal Propensity to Consume, indicating the proportion of additional income that is spent on consumption.