The Tax Rebates Passed by Congress in 2008 to Help

question 190

Multiple Choice

The tax rebates passed by Congress in 2008 to help move the economy more rapidly toward potential GDP are an example of

• A) automatic fiscal policy.
• B) discretionary fiscal policy.
• C) non-needs spending.
• D) contractionary fiscal policy.

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Definitions:

Velocity of Circulation

The rate at which money is exchanged in an economy, reflecting the frequency with which money is spent on goods and services.

Rational Expectations Theory

The hypothesis that individuals form forecasts about the future based on all available information, including the understanding of economic policies, thus acting optimally on these expectations.

Aggregate Demand

The total demand for goods and services within a particular market or economy at a given price level and in a given time period.

Oil Price Shocks

Sudden and significant changes in the global price of oil, which can lead to economic instability and affect global markets.