The Political Process by Which Fiscal Policy Is Made

question 20

Multiple Choice

The political process by which fiscal policy is made

• A)is relatively rapid, contributing to the effectiveness of fiscal policy.
• B)requires only that the president approve changes to the budget, a decision that takes several months.
• C)is efficient in reaching a decision within a year.
• D)is slow and results in a long time lag for fiscal policy.

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Definitions:

Note Payable

A written agreement where one party promises to pay another party a specific sum of money at a determined future date or on demand.

Interest Expense

The cost accrued on borrowed funds, reflected as a financial charge for the use of the lender's money.

FICA Withholding

Taxes that are automatically deducted from an employee’s wages for Social Security and Medicare, as mandated by the Federal Insurance Contributions Act.

Tax Rate

The percentage at which an individual or corporation is taxed, varying by income or profits level and jurisdiction.