Final answer:
The claim that all decreases in fund financial resources are called 'expenditures' is False. Expenditures refer to specific types of financial outflows. Understanding expenditures and fiscal responsibility is crucial for managing a government's budget effectively.
Step-by-step explanation:
The statement 'All decreases in fund financial resources, other than for repayment of fund liabilities, are termed "expenditures"' is False. Fund financial resources decrease for various reasons, and not all of these decreases are categorized as expenditures. Expenditures refer specifically to the spending of funds by a government entity for goods and services, transfer payments, or servicing debt.
Decreases can also occur due to changes in accounting practices, adjustments, losses, or reductions in funding without corresponding spending.
When considering the concept of budget deficit, it's important to note that this occurs when a government spends more than it collects in taxes, leading to a situation where borrowing becomes necessary.
Prolonged borrowing can have significant economic repercussions, including reducing the financial capital available to private-sector firms and contributing to trade imbalances and potential financial crises. Therefore, fiscal responsibility is a critical factor in governmental financial management.