Capital budgeting refers to the idea that.. а. The government directs a fixed percentage of its budget toward investment expenditure that benefits future generations. b. If the debt-to-GDP ratio rises to unacceptable levels, the central bank can monetise portions of the government debt. С. The government would classify all expenditures as either consumption (benefiting current generations) or investment (benefiting future generations). d. Counter-cyclical fiscal policy is included in the government budget. е. Government budgets should be designed to be balanced, while fully recognising that changing economic circumstances may prevent such balance.
Capital budgeting refers to the idea that.. а. The government directs a fixed percentage of its budget toward investment expenditure that benefits future generations. b. If the debt-to-GDP ratio rises to unacceptable levels, the central bank can monetise portions of the government debt. С. The government would classify all expenditures as either consumption (benefiting current generations) or investment (benefiting future generations). d. Counter-cyclical fiscal policy is included in the government budget. е. Government budgets should be designed to be balanced, while fully recognising that changing economic circumstances may prevent such balance.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![Capital budgeting refers to the idea that...
а.
The government directs a fixed percentage of its
budget toward investment expenditure that
benefits future generations.
b.
If the debt-to-GDP ratio rises to unacceptable
levels, the central bank can monetise portions of
the government debt.
С.
The government would classify all expenditures as
either consumption (benefiting current
generations) or investment (benefiting future
generations).
d.
Counter-cyclical fiscal policy is included in the
government budget.
е.
Government budgets should be designed to be
balanced, while fully recognising that changing
economic circumstances may prevent such
balance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc048c26-2d5f-4659-aa61-b29b18d7f996%2F3ad436e0-af47-4093-b32e-fabd3d30d3ba%2Ftjtnpw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Capital budgeting refers to the idea that...
а.
The government directs a fixed percentage of its
budget toward investment expenditure that
benefits future generations.
b.
If the debt-to-GDP ratio rises to unacceptable
levels, the central bank can monetise portions of
the government debt.
С.
The government would classify all expenditures as
either consumption (benefiting current
generations) or investment (benefiting future
generations).
d.
Counter-cyclical fiscal policy is included in the
government budget.
е.
Government budgets should be designed to be
balanced, while fully recognising that changing
economic circumstances may prevent such
balance.
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