A "Conservative" Would Most Likely Argue in Favor of

question 47

Multiple Choice

A "conservative" would most likely argue in favor of

• A)tax increases when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
• B)tax cuts when fiscal restraint is necessary, and spending cuts when fiscal stimulus is necessary.
• C)tax cuts when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
• D)spending increases when fiscal expansion is necessary, and tax increases when fiscal stimulus is necessary.

Recognize the principle of benefits-received and ability-to-pay in the taxation system.

Analyze the structure and incidence of specific taxes.

Comprehend the role of taxes in funding government services and their impact on public employees.

Understand the concept of tax shifting and its implications on buyers and sellers.

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Definitions:

Expiration

In finance, expiration refers to the date on which a derivative contract (such as options or futures) ceases to exist and settles between the contracting parties.

Arbitrage Opportunity

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another, realizing a profit with no risk.

American Call Option

An American call option is a financial contract that gives the holder the right, but not the obligation, to buy an asset at a specified price before the option expires.

Exercise Price

The specified price at which the option holder can buy or sell the underlying asset in options trading.