Budget Deficits Almost Always

question 300

Multiple Choice

Budget deficits almost always:

• A) decrease with inflation and increase with deflation.
• B) increase when unemployment rises and decrease when unemployment falls.
• C) decrease when unemployment rises and increase when unemployment falls.
• D) increase when the aggregate price level rises and decrease when the aggregate price level falls.

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Definitions:

Prior Period Adjustment

Corrections of errors or omissions in the financial statements of previous periods to accurately reflect past financial performance.

Retained Earnings

Retained earnings are the portion of a business's profits not distributed as dividends to shareholders but retained by the business for reinvestment.

Par Stock

The nominal or face value assigned to a share of stock, as stated in the corporate charter.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to increase the number of shares outstanding while maintaining the same total market value.