Which of the Following Has Been Advanced as a Legitimate

question 11

Multiple Choice

Which of the following has been advanced as a legitimate reason for federal budget deficits?

• A)Both c and d are legitimate reasons for government budget deficits.
• B)All of the following.
• C)Deficits help reduce the size and duration of recessions through the automatic stabilizers.
• D)Deficits have been used to finance capital projects.
• E)If the government had to fund all of its programs with tax revenues,the programs wouldn't get funded.

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Definitions:

Quick Ratio

A liquidity indicator that measures a company's ability to meet short-term obligations with its most liquid assets.

Fixed Charge Coverage

A financial ratio that measures a firm's ability to cover its fixed charges, such as interest and leases, with its earnings before interest and taxes (EBIT).

Quick Asset Ratio

A liquidity measure that indicates a company's capacity to pay its short-term liabilities with its quick assets, excluding inventories.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets over its current liabilities.