Fiscal Policy Works Primarily Through

question 128

Multiple Choice

Fiscal policy works primarily through

• A)Shifts of the AS curve.
• B)Shifts of the AD curve.
• C)The improvement of worker skills through subsidized training programs.
• D)Shifts of both AD and AS,as a result of changes in the interest rate.

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Definitions:

Variable Selling Expense

Expenses that vary with sales volume, including commissions and shipping charges.

Fixed Selling Expense

Costs associated with selling which remain constant regardless of the level of sales.

Variable Administrative Expense

Costs that vary with changes in the level of an organization's activity, related to administrative functions.

Contribution Margin

The revenue remaining after subtracting variable costs, which can then be used to cover fixed expenses and provide profit.