As a Possible Approach to Eliminating the Government Budget Deficit

question 5

Multiple Choice

As a possible approach to eliminating the government budget deficit, increasing taxes on the rich only would

• A) lead to a significant increase in tax revenues.
• B) not lead to a significant increase in tax revenues.
• C) lead to a greater number of entitlements.
• D) lead to an increase in real GDP.

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Definitions:

Ledger Accounts

Record-keeping systems that track financial transactions through debits and credits to maintain the financial health and status of an entity.

Financial Statements

Financial statements are formal records of the financial activities and position of a business, including the balance sheet, income statement, and cash flow statement.

Accruals

Accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Unrecorded Expense

A cost or liability that has been incurred but not yet documented or included in the financial records or statements of a company.