Discretionary Fiscal Policy

question 92

Multiple Choice

Discretionary fiscal policy

• A)requires action by Parliament.
• B)is triggered by the state of the economy.
• C)involves only a change in government outlays and no change in revenues.
• D)involves only a change in personal income tax rates.
• E)occurs during recessions but not during expansions.

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Definitions:

Flotation Cost

Flotation cost refers to the total costs incurred by a company in issuing new securities, including underwriting fees, legal fees, registration fees, and other expenses.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is considered when analyzing a company's financial health.

Project Financing

A financial structure where projects are funded with a loan structure that relies solely on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary collateral.

Debt Financing

Raising capital through the sale of bonds, bills, or notes to individuals or institutions.