What Are the Two Types of Discretionary Fiscal Policy

question 62

Multiple Choice

What are the two types of discretionary fiscal policy?

• A) automatic and expansionary
• B) expansionary and contractionary
• C) expansionary and recessionary
• D) automatic and contractionary

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Definitions:

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, labor, and both variable and fixed overhead - in the cost of a product.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ending with net profit or loss.

Variable Manufacturing Costs

Expenses that change in proportion to the amount of goods produced, including direct labor and raw materials.

Reconcile

The process of ensuring that two sets of records or accounts are in agreement, often used in accounting to compare financial records with actual bank statements.