An Example of Expansionary Fiscal Policy Is

question 102

Multiple Choice

An example of expansionary fiscal policy is

• A) lowering taxes.
• B) increasing taxes on everyone in the economy.
• C) decreasing the number of weeks an individual can receive unemployment.
• D) increasing taxes only on the top earners in the economy.
• E) increasing minimum wage.

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Definitions:

Variable Costing

An accounting method that records variable costs (costs that change with production levels) as product costs, while fixed costs are recorded as expenses in the period they are incurred.

Absorption Costing

A method in accounting that involves integrating all costs related to manufacturing, namely direct materials, direct labor, and all variable and fixed overhead expenses, into the pricing of a product.

Fixed Overhead

Costs that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Period Cost

Any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets. A non-manufacturing cost that is expensed in the period in which it is incurred.