Assume That Aggregate Demand in the Economy Is Excessive, Causing

question 174

Multiple Choice

Assume that aggregate demand in the economy is excessive, causing an inflationary gap.Which of the following would be most in accord with appropriate government fiscal policy?

• A)an increase in federal income tax rates
• B)an increase in the size of income tax exemptions for each dependent
• C)passage of legislation providing for the construction of 8,000 new post office buildings
• D)an increase in soil conservation subsidies to farmers

---

Definitions:

Total Assets

The sum of all owned resources (assets) that have economic value which a company or individual possesses.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.