Which of the Following Policy Combinations Was Used by the Government

question 76

Multiple Choice

Which of the following policy combinations was used by the government during the financial crisis of 2007-2009 in the United States?

• A) Income tax rates were increased, and payroll taxes were reduced.
• B) Payroll tax rates were increased, and government spending was reduced.
• C) The federal funds rate was decreased, and the quantity of required reserves was increased.
• D) A combination of both fiscal and monetary policies was used.

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Definitions:

Discretionary Income

The amount of an individual's income available for spending after accounting for essential expenses, such as taxes and necessities.

Gasoline Prices

The cost per unit volume of gasoline, typically measured per liter or gallon, which fluctuates based on factors like crude oil prices, demand, and taxes.

Gross Income

The total revenue generated from a business's activities before any expenses or taxes are deducted.

Disposable Income

The sum of money families can use for expenditures and savings once income taxes are deducted.