Which of the Following Assumptions Is True of Government Spending

question 75

Multiple Choice

Which of the following assumptions is true of government spending and taxes?

• A)They do not depend upon on the level of GDP.
• B)They may be changed only through direct action by the Congress.
• C)They change only when the price level changes.
• D)They change only upon executive order by the president of the United States.
• E)They are autonomous at low levels of GDP but not at higher levels of GDP.

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Definitions:

Dynamic Pricing

A pricing tactic that involves constantly updating prices to reflect changes in supply, demand, or market conditions.

Shrinkflation

The process of items shrinking in size or quantity while their prices remain the same or increase.

Volume Maximization

A pricing objective that involves setting prices low to encourage a greater volume of purchases; also called penetration pricing.

Penetration Pricing

A pricing strategy aimed at entering a new market by setting a low price initially to attract customers and gain market share.