Refer to the Diagram

question 355

Multiple Choice

Refer to the diagram. If the full-employment level of GDP is A, then it would be appropriate fiscal policy for government to

• A) decrease spending and increase taxes.
• B) decrease spending and decrease taxes.
• C) increase spending and increase taxes.
• D) increase spending and decrease taxes.

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Definitions:

New Equity Sales

The process of offering new shares of stock to the public or existing shareholders to raise capital.

Dividends Paid

The total amount of money distributed by a company to its shareholders out of its profits or reserves, usually on a regular basis.

CCA Rate

The annual depreciation rate used for tax purposes to write off the cost of capital assets over time in Canada.

UCC

Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.