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:

Spending Multiplier

The ratio of change in aggregate output (or income) to a change in spending that caused the change, showing how initial spending leads to increased total spending.

Autonomous Investment

Investment that does not change in response to alterations in the overall economy or income levels, such as public infrastructure investments.

Equilibrium Real GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand, adjusted for inflation.

Planned Aggregate Expenditure

The total amount households, businesses, and the government plan to spend on goods and services at different levels of national income.