Which of the Following Is TRUE

question 45

Multiple Choice

Which of the following is TRUE?

• A) When the economy is in recession,the cyclically adjusted budget deficit is lower than the reported deficit.
• B) In periods of economic expansion,the cyclically adjusted budget deficit is lower than the reported deficit.
• C) The reported budget deficit always equals the cyclically adjusted budget deficit with automatic stabilizers during recessions.
• D) The reported budget deficit always equals the cyclically adjusted budget deficit with automatic stabilizers during expansions.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the account’s increase.

Financial Statement(s)

Comprehensive reports created to present a company's financial performance, financial position, and cash flows over a specific period.

Permanent/Temporary

Categories used to differentiate items or statuses that are either enduring without significant change or existing for a limited time, respectively.

Cost Center

A unit or department that incurs costs but does not generate revenues.