An Expansionary Fiscal Policy Will

question 6

Multiple Choice

An expansionary fiscal policy will

• A) always result in a budget deficit.
• B) always result in a budget surplus.
• C) sometimes result in a budget deficit.
• D) never result in a budget surplus.
• E) More information is necessary to answer this question.

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Definitions:

Operating Costs

Expenses associated with the day-to-day functioning of a business, including costs for rent, utilities, payroll, and raw materials.

Discretionary Income

The portion of a person's income remaining for investment, savings, or expenditures after deducting taxes and essential living costs such as housing and food.

Personal Income

Refers to the total earnings received by individuals, including wages, salaries, bonuses, and income from investments.

Discretionary Income

the portion of an individual's income available for spending after the essentials (like food, shelter, and clothing) have been taken care of.