The Implementation Lag for Fiscal Policy Tends to Be Much

question 124

Multiple Choice

The implementation lag for fiscal policy tends to be much longer than for monetary policy because

• A) monetary changes only require the Fed to act.
• B) fiscal policy changes requires both houses of Congress and the President to act.
• C) fiscal policy usually requires committee hearings in both houses of Congress.
• D) all of the above

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Definitions:

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but retained for reinvestment in the business or to pay debt.

Net Income

The net income of a company following the subtraction of all costs and taxes from the gross revenue.

Cash Dividend

A cash dividend is a payment made by a company out of its profits to shareholders in the form of cash.

Annual Financial Statements

Reports that give an overview of a company's financial condition for a specific fiscal year, including income statements, balance sheets, and cash flow statements.