Contractionary Fiscal Policy Is So Named Because It

question 154

Multiple Choice

Contractionary fiscal policy is so named because it

• A)involves a contraction of the nation's money supply.
• B)necessarily reduces the size of government.
• C)is aimed at reducing aggregate demand and thus achieving price stability.
• D)is expressly designed to expand real GDP.

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Definitions:

Continuous Twelve-Month Budget

A financial planning document that forecasts revenues and expenses on a rolling monthly basis for a year.

Production Budget

An estimate of the total cost of production, including raw materials, labor, and overhead, for a specific period.

Cash Budget

A detailed plan that estimates the cash inflows and outflows over a specific period, used for managing liquidity and ensuring solvency.

Direct Materials Budget

A financial plan that estimates the raw materials needed to meet production goals and the costs associated with purchasing them.