Fiscal Policy Is a Good Option to Stimulate an Economy

question 10

Multiple Choice

Fiscal policy is a good option to stimulate an economy when:

• A) unemployment is very high.
• B) the economy is very close to its long-run potential growth rate.
• C) a real shock occurs.
• D) the economy is suffering from a decrease in productivity.

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Definitions:

Merchandising Company

A business that purchases goods in a finished condition for the purpose of resale without further manufacturing.

Investment Revenue

Income generated from investing financial assets, including dividends, interest, and capital gains.

Gross Profit

The financial metric determined by subtracting the cost of goods sold from revenue, representing the profit a company makes after accounting for the costs directly associated with production.

Gross Profit

The amount remaining from sales revenue after subtracting the cost of products sold, prior to removing expenses for overhead, wages, taxes, and interest.