Jasper Has Been Working a Lot of Overtime During the Most

question 79

Multiple Choice

Jasper has been working a lot of overtime during the most current economic expansion. As a result, his income is high enough for him to move from the 12 percent tax bracket to the 22 percent tax bracket. The increased amount Jasper pays to the government is an example of:

• A) discretionary fiscal policy slowing the economy.
• B) an automatic stabilizer slowing the economy.
• C) discretionary fiscal policy encouraging economic activity.
• D) automatic stabilizers encouraging economic activity.

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Definitions:

Discounting Approach

A financial strategy that determines the present value of future cash flows by applying a discount rate.

Discount Rate

It’s the interest rate used in the process of discounted cash flow analysis to evaluate the present value of anticipated future cash flows.

Required Return

The basic annual percent yield needed to appeal to individuals or businesses for investment in a specific project or security.

Cash Flows

The gross flow of cash and assets equivalent to cash moving into and away from a business operation.