Which One of the Following Statements Is NOT True

question 115

Multiple Choice

Which one of the following statements is NOT true?

• A)Expansionary fiscal policy is employed to offset recessionary gaps.
• B)Expansionary fiscal policy has an effect on interest rates.
• C)Crowding out dilutes the effect of expansionary fiscal policy.
• D)When crowding out occurs, fiscal policy is more effective.

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Definitions:

Repurchase Shares

The action taken by a company to buy back its own shares from the marketplace, reducing the amount of outstanding stock.

Borrowing

The act of obtaining funds from another party, often a financial institution, with a promise to repay the principal amount along with interest or other charges over a period.

All Equity

A financial structure where a company is financed entirely through equity without any debt.

Repurchase Shares

involves a company buying back its own shares from the marketplace, which can reduce the number of outstanding shares and potentially increase the value of remaining shares.