All of the Following Are Tools of Fiscal Policy Except

question 85

Multiple Choice

All of the following are tools of fiscal policy except one.Which is the exception?

• A)Taxes
• B)Transfer payments
• C)Interest rates
• D)Government purchases of goods
• E)Government purchases of services

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Definitions:

Proprietorships

businesses owned and operated by a single individual, where the owner is personally responsible for the company's debts and obligations.

Corporations

A business firm owned by shareholders who possess ownership rights to the firm’s profits, but whose liability is limited to the amount of their investment in the firm.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.

Principal-Agent Problem

A dilemma in economics occurring when one party (the agent) is able to make decisions and/or take actions on behalf of, or that impact, another party (the principal).