Fiscal Policy Affects the Economy

question 42

Multiple Choice

Fiscal policy affects the economy

• A)only in the short run.
• B)only in the long run.
• C)in both the short and long run.
• D)in neither the short nor the long run.

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Definitions:

Costs

The expenses incurred in the production or acquisition of goods and services, including both direct and indirect expenditures.

Inelastic Demand

A situation in which the percentage change in quantity demanded of a good is less than the percentage change in price, indicating low sensitivity to price changes.

Tax Burden

The total amount of taxes that individuals, businesses, or other entities are obligated to pay, often expressed as a percentage of income or GDP.

Consumers

Individuals or organizations that use economic goods and services.