(Figure: Determining Fiscal Policy) the Best Discretionary Fiscal Policy Option

question 29

Multiple Choice

(Figure: Determining Fiscal Policy) The best discretionary fiscal policy option is:

• A) expansionary fiscal policy that leads to full employment.
• B) contractionary fiscal policy that leads to full employment.
• C) a combination of expansionary and contractionary fiscal policies to achieve full employment and stable prices.
• D) only fiscal policies that lead to a lower price level.

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Definitions:

Standard Price

A predetermined cost that companies use to value inventory and cost of goods sold, often used in budgeting and performance evaluation.

Actual Price

The real or market price at which an asset or service is bought or sold.

Materials Price Variance

Materials price variance is the difference between the actual cost of materials used in production and the expected (or standard) cost, indicating efficient materials purchasing.

AQ × AP

Represents the multiplication of the Actual Quantity (AQ) by the Actual Price (AP), often used in financial and operational analyses.