If the Government Started with a Budget Deficit and Moved

question 79

Multiple Choice

If the government started with a budget deficit and moved to a surplus, which statement would best describe the effects of these changes?

• A) Domestic investment would rise, and the trade balance would move towards surplus.
• B) Domestic investment would rise, and the trade balance would move towards deficit.
• C) Domestic investment would fall, and the trade balance would move towards surplus.
• D) Domestic investment would fall, and the trade balance would move towards deficit.

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Definitions:

Work In Process

Inventory consisting of items that are in the production process but are not yet complete.

Factory Overhead

Every expense linked to manufacturing that doesn't include the cost of direct materials and wages for direct labor.

Equivalent Units

A term used in cost accounting to express the amount of unfinished goods in terms of complete units of output.

Direct Materials

Direct materials are raw inputs that are directly consumed in the manufacturing process of a product and can be directly attributed to that product.