Recent Studies of the Effectiveness of Fiscal Policy Tend to Suggest

question 160

True/False

Recent studies of the effectiveness of fiscal policy tend to suggest that increases in government spending are more effective than tax cuts in stimulating real GDP.

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Definitions:

Margin

Net operating income divided by sales.

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs, calculated as contribution margin divided by sales revenue.

Fixed Expenses

Expenditures that stay unchanged despite differences in the volume of production or sales, covering items like rental fees, payroll, and coverage costs.

Sales

The exchange of goods or services for money, quantifying the performance and profitability of a business.