In Practice, Discretionary Fiscal Policy Has

question 2

Multiple Choice

In practice, discretionary fiscal policy has

• A)been unsuccessful in offsetting recessions or booms.
• B)been successful in offsetting booms but not recessions.
• C)been successful in offsetting recessions and booms.
• D)been successful in offsetting recessions but not booms.
• E)always had a very adverse effect on the economy.

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Definitions:

Taxable Income

The portion of an individual's or company's income that is subject to taxes according to government regulations.

Income Measurement

The process of determining the monetary amount of the income earned by a business during a specific period.

Constructive Receipt

A tax principle stating that income is considered received by the taxpayer once it is credited to their account or made available without restriction.

Taxable Income

The portion of income used to calculate how much the entity owes in taxes to the government, after all deductions and exemptions are applied.