The Effectiveness of Any Stimulus Program Depends On

question 80

Multiple Choice

The effectiveness of any stimulus program depends on:

• A)the nature of the tax only
• B)the size of the tax and spending multipliers
• C)the nature of the tax and tax multipliers
• D)the income group targeted
• E)the marginal propensity to consume only

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Definitions:

Future Cash Flows

Estimated amounts of money expected to be received or paid out over future periods.

Cash Payback Method

A financial analysis method used to determine the time needed for an investment to generate cash flows sufficient to recover the initial investment cost.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.

Capital Rationing

A strategy or decision-making process that involves allocating and limiting investment funds to various projects to maximize a company's value.