Use the Following to Answer Questions

question 228

Multiple Choice

Use the following to answer questions:
Figure: Fiscal Policy Options
-(Figure: Fiscal Policy Options) Look at the figure Fiscal Policy Options. If the aggregate demand curve is AD, the most appropriate discretionary fiscal policy is to _____ government spending and _____ income tax rates.

• A)decrease; increase
• B)decrease; maintain
• C)increase; increase
• D)increase; maintain

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Definitions:

Compounded Quarterly

Interest calculation method where the interest is added to the principal amount every quarter, causing the interest to be calculated on the new total.

Deferred Annuity

An insurance contract in which payment of annuities is delayed to a future date.

Compounded Annually

The process where interest is calculated and added to the principal amount once every year, leading to an increase in the interest amount for the following year.

Deferral Period

A set period during which payments of principal or interest on a loan are temporarily delayed.