Table 12.3 -Refer to Table 12.3.Consider the Hypothetical Information in the Table

question 62

Multiple Choice

Table 12.3
-Refer to Table 12.3.Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2017 and in 2018 if the federal government does not use fiscal policy.If the federal government wants to keep real GDP at its potential level in 2018, it should

• A)buy Government of Canada bonds.
• B)conduct expansionary fiscal policy.
• C)decrease government purchases.
• D)decrease the discount rate.
• E)increase infrastructure investment.

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Definitions:

Retained Earnings

Net earnings not distributed as dividends but reinvested back into the company or kept as a reserve for future use.

Net Loss

The amount by which a company's expenses exceed its revenues over a specific period, indicating a decrease in net assets.

Discontinued Operations

Components of a company's business that have been disposed of or are classified as held for sale, and whose financial results are separated from ongoing operations.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, providing insight into a company's financial health.