Which One of the Following Is an Example of Discretionary

question 228

Multiple Choice

Which one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?

• A) a tax increase passed into law by Congress
• B) decrease in the money supply by the Federal Reserve
• C) an increase in government expenditures approved by Congress
• D) an agreement among major banks to lower interest rates

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Definitions:

Marginal Productivity Theory

An economic theory suggesting that the wage or value of a factor of production is determined by its marginal contribution to the output of goods or services.

Income Inequality

The unequal allocation of financial resources among a community, resulting in disparities between affluent individuals and those in poverty.

Imperfectly Competitive Firms

Companies that operate in market settings where individual sellers have some control over the price of their products, contrary to perfect competition.

Property Resources

Assets owned by individuals or entities, including land, buildings, and intellectual property, that can be used to produce goods and services.