An Example of Automatic Fiscal Policy Is

question 84

Multiple Choice

An example of automatic fiscal policy is

• A)Congress passing a tax rate reduction package.
• B)the federal government expanding spending at the Department of Education.
• C)expenditure for unemployment compensation increasing as economic growth slows.
• D)the Federal Reserve reducing interest rates as economic growth slows.
• E)a change in taxes that has no multiplier effect.

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Definitions:

Capital Structure

The composition of a firm's financing through a combination of debt and equity.

Funds

Financial resources that are set aside for a specific purpose or investment, including both publicly traded funds and private investments.

Corporate Tax Liability

Corporate tax liability is the total amount of tax that a corporation is legally obligated to pay to the government based on its taxable income.