A Policy of Fiscal Stimulus Involves _____ Taxes and _____

question 238

Multiple Choice

A policy of fiscal stimulus involves _____ taxes and _____ government spending.

• A) increasing; decreasing
• B) increasing; increasing
• C) decreasing; decreasing
• D) decreasing; increasing

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Definitions:

Government

The organization that is the governing authority of a political unit, the ruling power in a political society, and the apparatus through which a governing body functions and exercises authority.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service, intended to protect consumers from market conditions that could make commodities unaffordable.

Equilibrium Price

The price at which the quantity of a good or service supplied is equal to the quantity demanded.

Surplus

An excess amount of something, especially in the context of production and supply exceeding demand in economics, leading to a situation where the quantity supplied is greater than the quantity demanded.