A Reduction in Government Expenditure or an Increase in Taxes

question 88

Multiple Choice

A reduction in government expenditure or an increase in taxes is defined as:

• A) expansionary fiscal policy.
• B) contractionary monetary policy.
• C) expansionary monetary policy.
• D) contractionary fiscal policy.

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Definitions:

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, such as straight-line or declining balance methods.

Double-Declining-Balance

A method of accelerated depreciation which doubles the straight-line depreciation rate.

Straight-Line Rate

The straight-line rate is a method of depreciation that evenly spreads the cost of an asset over its useful life.

Capital Expenditures

Capital invested by a business to purchase or improve tangible assets, like real estate, factories, or machinery.