The Mistiming Problem with Discretionary Fiscal Policy Results from

question 22

Multiple Choice

The mistiming problem with discretionary fiscal policy results from

• A)a delay in recognizing a recession.
• B)a delay in agreeing on a solution to a recession.
• C)a delay in getting a particular plan implemented with the money getting into peoples' hands.
• D)all of the options are correct.

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Definitions:

Effective Tax Rate

The average percentage of one's total income paid in taxes, factoring in all deductions and credits.

Capital Structure

The mix of a company's debt, equity, and other sources of financing used to fund its operations and growth.

Cost of Capital

The minimum return that a business needs to generate on its projects to preserve its marketplace value and draw in financing.

Flotation Costs

Expenses incurred by a company in issuing new stocks or bonds, including underwriting, legal, and registration fees.