Johnny Has Been Working a Lot of Overtime During the Most

question 58

Multiple Choice

Johnny has been working a lot of overtime during the most current economic boom. As a result, his income is high enough for him to move from the 10 percent tax bracket to the 15 percent tax bracket. So, Johnny pays a higher percentage of a higher income to the government this year. The increased amount paid to the government is an example of:

• A) discretionary fiscal policy slowing the economy.
• B) automatic stabilizers slowing the economy.
• C) discretionary fiscal policy encouraging economic activity.
• D) automatic stabilizers encouraging economic activity.

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Definitions:

West Indies

A region in the Caribbean basin that encompasses a group of islands known for their diverse cultures, colonial history, and significant role in the global economy, especially during the era of the Atlantic slave trade.

Trade Deficits

A situation in which a country imports more goods and services than it exports, leading to a negative balance of trade.

King George III

Monarch of Great Britain and Ireland from 1760 until 1820, whose reign included significant events such as the American Revolutionary War and the Napoleonic Wars.

George Grenville

A British politician who served as Prime Minister and is known for implementing policies that contributed to the American Revolution.