Which of the Following Statements Is True

question 115

Multiple Choice

Which of the following statements is true?

• A)Federal budget deficits became progressively smaller during the 1990s and turned into a surplus by 1998.
• B)Federal spending declined relative to GDP,while federal revenues rose relative to GDP during the 1980s.
• C)Functional finance says that policy makers should be concerned less with the economy's potential output and more with balancing the budget annually.
• D)A disadvantage of functional finance is that it increases the level of unemployment during recessions.
• E)A disadvantage of annual financed budget is that it dampens swings in the business cycle without increasing the national debt.

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Definitions:

Wages

are payments made to employees for their services, typically calculated on an hourly, daily, or piecework basis.

Withholding Allowances

Claims made by employees on their W-4 form to reduce the amount of federal income tax withheld from their paychecks.

Tax Liability

The total amount of tax owed by an individual or corporation to the tax authorities.

Monthly Schedule Depositor

A designation for businesses that determines how frequently they must deposit employment taxes to the IRS based on their payroll size.