During a Recession, the Political Incentive Structure Will Encourage Politicians

question 172

Multiple Choice

During a recession, the political incentive structure will encourage politicians to

• A) undertake sound economic policies that are consistent with stability and growth.
• B) adopt any policies, even bad ones, that give the appearance of taking action.
• C) undertake policies that promote long-term economic growth rather than short-term benefits.
• D) do nothing and let the recession run its course.

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Definitions:

Financing Activities

Transactions and events affecting the equity and debt of the company, usually related to borrowing, repaying, and issuing equity.

Noncash Investing

Investment activities that do not involve the immediate outlay of cash, such as the exchange of one asset for another.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing shares, borrowing money, and repaying debt.

Statement Of Cash Flows

A financial report summarizing the total cash inflows and outflows experienced by a corporation.