Which of the Following Is an Example of an Expansionary

question 36

Multiple Choice

Which of the following is an example of an expansionary fiscal policy?

• A) the Fed selling government securities in the open market
• B) the federal government increasing the marginal tax rate on incomes above $200,000
• C) the federal government increasing the amount of money spent on public health programs
• D) the federal government reducing pollution standards to allow firms to produce more output

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Definitions:

Yearly Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear over time.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument back to their present value, thus helping to determine the potential value of an investment.

Straight-Line Depreciation

A method of allocating an asset's cost evenly throughout its useful life.

MACRS

Modified Accelerated Cost Recovery System; a method of depreciation applied in the United States that allows businesses to recover investments in certain property over a specified life.