Which of the Following Actions Could Be Undertaken If the Government

question 212

Multiple Choice

Which of the following actions could be undertaken if the government wants to reduce an inflationary gap?

• A)Increase taxes and reduce government spending.
• B)Reduce taxes and increase government spending.
• C)Increase taxes and increase government spending.
• D)Reduce taxes and reduce government spending.

---

Definitions:

Income Statement

A financial document that shows a company's revenues and expenses over a specified period, illustrating how the net revenue of the company is transformed into net income.

Dividend Yield Ratio

A financial ratio that measures the amount of dividends an investor is expected to receive for each dollar invested in a company's stock, expressed as a percentage.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Dividends on Common Stock

Payments made to shareholders out of a company's earnings, specifically to the holders of its common stock.