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

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Definitions:

Net Income

The net income of a business following the subtraction of all costs and taxes from its gross earnings.

Income Distribution

The allocation of a company's net income among shareholders in the form of dividends and retained earnings within the company.

Capital Balance

Represents the amount of capital contributed by investors or owners, plus retained earnings minus any distributions or withdrawals.

Interest

The cost paid for borrowing money, typically expressed as a percentage rate over the period of borrowing.