A Binding Borrowing Constraint Will ______ the Potency of an Announced

question 87

Multiple Choice

A binding borrowing constraint will ______ the potency of an announced future tax cut to influence aggregate demand but will ______ the potency of a temporary tax cut.

• A) not affect; increase
• B) increase; not affect
• C) decrease; increase
• D) increase; decrease

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Definitions:

Accounts

Financial records of an organization that represent transactions and their effects on its assets, liabilities, and equity.

Chart of Accounts

A structured list of all the accounts in a company’s general ledger, which records all financial transactions.

Journal Entry

A record in the books of accounts that represents a transaction and its effect on various accounts.

Posting References

Identifiers used in accounting to link journal entries to the corresponding ledger accounts for audit trails and record-keeping accuracy.