Johnny Has Been Working a Lot of Overtime During the Most

question 58

Multiple Choice

Johnny has been working a lot of overtime during the most current economic boom. As a result, his income is high enough for him to move from the 10 percent tax bracket to the 15 percent tax bracket. So, Johnny pays a higher percentage of a higher income to the government this year. The increased amount paid to the government is an example of:

• A) discretionary fiscal policy slowing the economy.
• B) automatic stabilizers slowing the economy.
• C) discretionary fiscal policy encouraging economic activity.
• D) automatic stabilizers encouraging economic activity.

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Definitions:

Savings and Loans

Financial institutions traditionally focused on accepting savings deposits and making mortgages and other loans.

Credit Unions

Member-owned financial cooperatives that provide savings, credit, and other financial services to their members with typically favorable interest rates and terms.

Electronic Fund Transfers

The transfer of money from one account to another, conducted electronically, often through computer systems and without the direct hand-off of physical money.

Negotiable Instruments

Financial documents that guarantee the payment of a specific amount of money, either on demand or at a set time, and are transferable from one party to another.