An Active Stabilization Policy Designed to Limit the Size of Government

question 51

Multiple Choice

An active stabilization policy designed to limit the size of government would

• A)raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap.
• B)raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap.
• C)reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap.
• D)reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.

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Definitions:

401(k) Plans

Retirement savings plans sponsored by an employer that allow employees to save and invest a portion of their paycheck before taxes are taken out.

Hourly Wage

The amount of money paid for each hour of work.

Nonexempt Employees

Workers who are entitled to receive overtime pay under the Fair Labor Standards Act (FLSA) for hours worked beyond the standard workweek.

FLSA Act

The FLSA Act, or Fair Labor Standards Act, is US legislation designed to protect workers against poor wages and excessive working hours, establishing minimum wage, overtime pay eligibility, and child labor standards.