Using Fiscal Policy, the Best Way to Get the Economy

question 154

Multiple Choice

Using fiscal policy, the best way to get the economy out of a recession in the short run is to
Government expenditures on goods and services or taxes.

• A) decrease; increase
• B) decrease; decrease
• C) increase; increase
• D) increase; decrease

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Definitions:

Equity Risk

The risk of loss associated with fluctuations in the stock market or the volatile performance of individual stocks.

Capital Structure Policy

A company's decisions and strategies regarding the mix of its financing sources (debt and equity) to fund its operations and growth.

Financial Risk

The likelihood of financial setbacks in an investment or business initiative.

Interest Tax Shield

Lowering income taxes through the deduction of debt interest payments from taxable earnings.