The Tax Rebates Passed by Congress in 2008 to Help

question 123

Multiple Choice

The tax rebates passed by Congress in 2008 to help move the economy more rapidly toward potential GDP are an example of

• A) lump-sum taxes.
• B) automatic fiscal policy.
• C) contractionary fiscal policy.
• D) discretionary fiscal policy.

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Definitions:

Labor Employment

The act of engaging individuals to perform tasks for wages or salary.

Change in Output

This refers to the variation in the quantity of goods or services produced by a company or economy over a certain period.

Law of Diminishing Returns

An economic principle stating that if one input in the production of a product is increased while other inputs are held constant, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Marginal Returns

The additional output gained by adding one more unit of a specific input, assuming all other inputs remain constant.