Which of the Following Is an Example of a Fiscal

question 27

Multiple Choice

Which of the following is an example of a fiscal policy designed to counter a recessionary gap?

• A)decreasing government expenditures on goods and services
• B)increasing debt interest payments
• C)decreasing transfer payments
• D)increasing taxes
• E)increasing transfer payments

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Definitions:

National Saving

The sum of private and public savings in a country, essentially the total income of the nation that remains after paying for consumption and government expenditures.

Interest Rates

The fee, shown as a proportion of the total loan amount, that a lender demands from a borrower for the use of their funds.

Index Funds

Investment funds that replicate the performance of a specific financial market index, aiming at broad market exposure with low operating expenses.

Financial Intermediaries

Institutions that channel the savings of individuals, businesses, and governments into loans or investments.