Which of the Following Would Be Considered an Active Fiscal

question 237

Multiple Choice

Which of the following would be considered an active fiscal policy?

• A)The Bank of Canada increases the money supply.
• B)Tax incentives are offered to encourage the purchase of fuel-efficient cars.
• C)Spending on military missions in Afghanistan is increased to promote national security.
• D)A tax cut is implemented to stimulate spending during a recession.
• E)The province of Ontario building new hockey rinks to encourage healthier living.

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Definitions:

Separate Markets

Distinct spaces or platforms where goods, services, or financial instruments are traded independently, often with little to no interaction or effect on each other.

Resold

Refers to an item being sold again after its initial purchase.

Monopolist's Profits

The excess earnings a monopolist achieves, derived from the difference between its revenues and costs, due to its unique market power and lack of competition.

Demand Segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors.