Which of the Following Statements Is True Regarding Expansionary Fiscal

question 42

Multiple Choice

Which of the following statements is true regarding expansionary fiscal policy?

• A) It leads to an increase in the supply of bonds by the Treasury.
• B) It leads to a fall in interest rates.
• C) It leads to an increase in net exports.
• D) It tends to reduce to size of government.

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Definitions:

Nominal Return

The amount of profit or loss on an investment before adjusting for inflation.

Real Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power gained or lost.

Holding-period Return

The overall profit earned from owning an asset or a collection of assets for a certain duration, taking into account both earnings and growth in value.

Dividend

Money distributed by a corporation to its shareholders, often as a share of the earnings.