Unlike Fiscal Policy, Monetary Policy

question 58

Multiple Choice

Unlike fiscal policy, monetary policy:

• A) must be initiated by the president or by Congress in the United States.
• B) includes taxation and spending actions, such as increasing government spending or encouraging private spending.
• C) consists of government actions intended to spark or diminish consumption.
• D) consists of manipulations in the interest rates, banking rules, and the volume of currency in a country.

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Definitions:

Deferred Losses

Losses that have been recognized in the financial statements but are not yet realized through actual transaction, to be recognized in future periods.

Net Operating Losses

Financial losses that occur when a company's allowable deductions exceed its taxable income, which can be carried over to reduce future taxable income.

Intra-entity Gross Profit

Profits recognized from transactions that occur within the same company, not yet realized by the external market.

Income Tax Liability

The total amount of taxes owed by an individual or a business entity to the federal, state, or local government based on income.