An Example of Automatic Fiscal Policy Is

question 4

Multiple Choice

An example of automatic fiscal policy is

• A)an interest rate cut,initiated by an act of Congress.
• B)an increase in the quantity of money.
• C)a tax cut,initiated by an act of Congress.
• D)a decrease in tax revenues,triggered by the state of the economy.
• E)any change in the interest rate,regardless of its cause.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Sales Units

The number of individual items or units a business sells within a specific period.

Variable Expenses

Expenses that change in proportion to the activity of a business such as production volume or sales.

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.