An Example of a Negative Demand Shock Is

question 30

Multiple Choice

An example of a negative demand shock is

• A) a decrease in the money supply.
• B) a decrease in government spending.
• C) an increase in foreign export demand.
• D) a decrease in the price of imported oil.
• E) a decrease in the money supply and a decrease in government spending.

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Definitions:

Foreign Tax Credit

A tax credit that allows taxpayers to offset income taxes paid to foreign governments against their U.S. tax liabilities, to avoid double taxation of the same income.

Earned Income Credit

The Earned Income Credit (EIC) is a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children, to reduce poverty and encourage work.

Nonrefundable Credit

A tax credit that can only reduce a taxpayer’s liability to zero, but unlike refundable credits, any excess is not paid out to the taxpayer.

Adoption Credit

A tax benefit offered to taxpayers to offset some costs of legally adopting a child, which can reduce tax liability.