BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raising the prime interest rate
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Lowering tax rates
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Printing less money
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Borrowing more money
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Detailed explanation-1: -In the short term, governments may focus on macroeconomic stabilization-for example, expanding spending or cutting taxes to stimulate an ailing economy, or slashing spending or raising taxes to combat rising inflation or to help reduce external vulnerabilities.
Detailed explanation-2: -Supply-side economics aims to bolster an economy by implementing policies that will lead to an increased supply of goods and services and subsequent economic growth such as: Reducing corporate income tax rates to provide companies with more cash for reinvestment.
Detailed explanation-3: -An expansionary fiscal policy lowers tax rates or increases spending to increase aggregate demand and fuel economic growth.
Detailed explanation-4: -When the government is exercising its powers by lowering taxes and increasing their expenditures, they are practicing expansionary fiscal policy.