When Changes in Taxes and Government Spending Occur in the Economy

question 147

Multiple Choice

When changes in taxes and government spending occur in the economy without explicit action by Congress, such policy is called ______ fiscal policy.

• A) cyclical
• B) implicit
• C) discretionary
• D) nondiscretionary

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Definitions:

Product Liability

The legal liability a manufacturer or trader incurs for producing or selling a faulty product.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances.

Garnishment

A proceeding in which a creditor legally seizes a portion of a debtor's property, such as wages, that is in the possession of a third party, such as an employer.

Misrepresentation

A false statement or lie that deceives, misleads, or distorts the truth.