Mainstream Macroeconomics Would Suggest That fiScal Policy

question 124

Multiple Choice

Mainstream macroeconomics would suggest that fiscal policy

• A) affects GDP and the price level through changes in aggregate supply.
• B) changes aggregate demand and GDP through the multiplier process.
• C) has no effect unless the fiscal policy is accompanied by changes in the money supply.
• D) is relatively ineffective because the outcomes are anticipated and offset.

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Definitions:

Consolidation Purposes

Consolidation purposes involve reasons or objectives behind combining financial statements of multiple entities within a single corporate group, mainly for accurate financial reporting, analysis, and decision-making.

Consolidation Entry

An entry made in the financial records to combine the assets, liabilities, and other financial items of parent and subsidiary companies into one set of financial statements.

Loss on Sale

This refers to the situation where the sale price of an asset is less than its book value, resulting in a financial loss for the entity.

Equity Method

An accounting technique used when an investor holds significant influence over, but not majority ownership of, another company, incorporating the investor's share of the profits and losses.