An Example of Countercyclical Fiscal Policy Is

question 144

Multiple Choice

An example of countercyclical fiscal policy is:

• A)raising government spending when the economy is above potential.
• B)raising government spending when the economy is at potential.
• C)reducing government spending when the economy is above potential.
• D)reducing government spending when the economy is below potential.

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Definitions:

High-low Method

An approach to estimate fixed and variable costs by using the highest and lowest levels of activity.

Monthly Production Volume

The total amount of goods produced by a manufacturer within a one-month period, indicating the scale of operations.

Total Cost

The complete cost of production, including both fixed and variable costs.

Mixed Cost

Expenses that have both fixed and variable components, changing with the level of production or sales activity.