Economists Who Are in Favor of Smaller Government Tend to Prefer

question 76

Multiple Choice

Economists who are in favor of smaller government tend to prefer ________________ when expansionary _______________ policy is needed to raise aggregate demand.

• A) tax cuts; fiscal
• B) tax cuts; monetary
• C) more government spending; fiscal
• D) more government spending; monetary

---

Definitions:

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equity) in a balance sheet is represented as a proportion of the total account.

Inventory Turnover

A measure of the liquidity of inventory; computed by dividing cost of goods sold by average inventory.

Liquidity

The ability of an asset to be quickly converted into cash or the ability of a company to meet its short-term financial obligations.

Federal Government

The national government of a federated state, which holds the authority to govern at a national level, possessing powers typically outlined in a constitution.