Which of the Following Is an Example of Discretionary Fiscal

question 163

Multiple Choice

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

• A)an increase in unemployment insurance payments during a recession
• B)an increase in income tax receipts with rising income during an expansion
• C)the tax cuts passed by Congress in 2001 to combat the recession
• D)a decrease in food stamps issued during an expansion or boom

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Definitions:

Trial Balance

A bookkeeping report that lists all the balances in each account ledger in two columns, debits and credits, ensuring that total debits equal total credits.

Adjusting Entries

Entries made in accounting books at the end of the cycle to rightly allocate the period's earnings and financial outgoings.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the loss of value over time.

Notes Payable

Financial obligations or loans evidenced by promissory notes, to be repaid to the creditor at future dates.