Which of the Following Would Decrease the Size of a Federal

question 64

Multiple Choice

Which of the following would decrease the size of a federal budget deficit?

• A)a recession
• B)an increase in defense spending
• C)growth in real GDP
• D)a decrease in taxes
• E)an increase in transfer payments

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Definitions:

Cash Flows

The inflow and outflow of cash and cash equivalents, representing the operating, investing, and financing activities of an entity over a period.

Indirect Method

In finance, it refers to a cash flow statement approach that adjusts net income for the effects of transactions that do not involve cash, to calculate net cash flow from operating activities.

Income Statement

A financial document that provides a summary of a company's revenues, expenses, and profits/losses over a specified period of time.

Net Cash

An accounting term that represents the amount of cash remaining after all operating, investing, and financing activities are accounted for in a given period.