Which of the Following Statements Is FALSE

question 346

Multiple Choice

Which of the following statements is FALSE?

• A) Fiscal policy is the attempt to influence the economy using taxes, transfer payments, and government expenditures.
• B) Government expenditure affects aggregate demand directly because government expenditure is a component of aggregate demand.
• C) Taxes and transfer payments affect aggregate demand by changing disposable income.
• D) An increase in disposable income leads to a decrease in aggregate demand.

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Definitions:

Collection Agency

An organization employed by creditors to collect funds that are owed by individuals or businesses, usually when those debts are past due.

Principal

The original amount of money borrowed or invested, excluding any interest or dividends.

Defaults

In financial contexts, refers to the failure to meet the legal obligations or conditions of a loan, such as not making the required payments.

Secured Transaction

A financial agreement in which the borrower provides the lender a security interest in certain assets as collateral for a loan.