If the Policy Makers Implement a Tax Cut as a Discretionary

question 144

Multiple Choice

If the policy makers implement a tax cut as a discretionary fiscal policy to combat a recessionary gap, it may fail to achieve its objective if:

• A)the households think of it as a permanent policy.
• B)the households think of it as a temporary policy.
• C)the households think of it as a 10 year program.
• D)the households think of it as a loss of revenue for the government.

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Definitions:

Prevention Costs

Expenditures made to avoid defects in products or inefficiencies in services, part of quality control measures.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing the product's value.

Value-Added

The enhancement a company gives its product or service before offering the product to customers.

Non-Value-Added

Activities or processes that do not add value to a product or service from the customer's perspective, potentially leading to unnecessary costs.