A Fiscal Action That Is Triggered by the State of the Economy

question 9

Multiple Choice

A fiscal action that is triggered by the state of the economy is called

• A) monetarist policy.
• B) the tax wedge.
• C) automatic fiscal policy.
• D) the multiplier.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue.

Tax Account

An account designated for the accumulation and payment of taxes owed by an individual or organization.

Net Working Capital

The gap between a firm's present assets and liabilities, showcasing its immediate fiscal stability and the effectiveness of its operations.

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, emphasizing the difference in the company's cash flows with and without the project.