The Use of Fiscal Policy Is Limited Because

question 80

Multiple Choice

The use of fiscal policy is limited because

• A)of recognition lag.
• B)of law-making lag.
• C)of impact lag.
• D)all of the above
• E)none of the above

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Definitions:

Income Tax

A tax levied by governments on the income generated by businesses and individuals within their jurisdiction.

Dividend Reinvestment Plan

A corporate program enabling investors to use their cash dividends to buy more or partial shares when dividends are paid out.

Residual Dividend Policy

A strategy where dividends are paid to shareholders from the leftover or residual earnings after all operational and expansion-related expenses are met.

Target Capital Structure

The mix of debt, preferred equity, and common equity that a company aims to hold over time, optimizing its cost of capital and market value.