With Discretionary Policy Making, Fiscal and Monetary Policies Are Usually

question 198

Multiple Choice

With discretionary policy making, fiscal and monetary policies are usually

• A) undertaken in response to or anticipation of some change in the overall economy.
• B) set according to pre-established standards that do not take into account any changes in the economy.
• C) immune to any political overtones.
• D) immune to any lag times that might counter their effectiveness.

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Definitions:

IRR

The Internal Rate of Return is a metric used in financial analysis to estimate the profitability of potential investments, indicating the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

WACC

WACC stands for Weighted Average Cost of Capital, a calculation that reflects the overall cost of a company's securities, including debt and equity, used for investment appraisal.

WACC

This metric, known as the Weighted Average Cost of Capital, calculates a business's cost of capital by assigning weights proportionally to each type of capital.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.