FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Suppose the economy is in a recession and the government is running a budget surplus. This implies the government is running a __________ and decreasing its __________.
structural surplus; net debt
structural deficit; net debt
structural deficit; net asset
structural surplus; net asset
balanced budget; net asset
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- From the following, please identify the 2 statements that are true as well as the 2 statements that are false. A) The most common approach to translate budgets and compare a budget with actual performance uses the forecast rate. B) A major force leading to the convergence of accounting standards is the global separation of capital markets. C) For U.S. companies, foreign-currency-denominated receivables and payables give rise to exchange gains and losses only when the dollar weakens against the foreign currency D) According to the translation process in the United States, companies recast their financial statements consistent with U.S. GAAP, and then translate them into U.S. dollarsarrow_forwardA result of budget deficits is that governments have to borrow more, sometimes resulting in: a. Top of Form increasing interest costs. b. decreasing interest costs. C, increased foreign borrowing. d, crowding out the private sector for capital. All other things remaining the same, which one of the following events would directly increase the size of the UK's national debt? An increase in A. mortgage borrowing from UK banks. B. overseas lending to UK firms. C. the UK's current account deficit. D. the UK government's budget deficit.arrow_forwardExternal fundng needs tend to ____ at the end of economic expansion and ____ during recessions. peak; bottom out bottom out; bottom out neitherarrow_forward
- What is the role of the Federal Reserve with interest rates during a recession?arrow_forwardSuppose a government starts spending less than it receives in tax revenue each year. All else equal, this action would cause the net present value of firms' projects to do what: a. Increase b. Decrease c. Change uncertainly d. Not changearrow_forward
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