BUSINESS ADMINISTRATION
BUSINESS POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Examples of contractionary fiscal policy includes which of the following (choose all correct answers)?
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Raise taxes on corporations
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Lower the corporate tax rate
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Government increases spending on research in Antarctica
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Government cuts spending on education
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Explanation:
Detailed explanation-1: -Answer and Explanation: The correct option is: b) Cutting spending on the military.
Detailed explanation-2: -Answer and Explanation: (c) The Fed raises the discount rate is an example of contractionary monetary policy.
Detailed explanation-3: -Contractionary fiscal policy includes raising taxes, decreasing spending, or a combination of the two. These actions reduce an economy’s aggregate demand. Businesses slow production as their inventories increase. They may lay off workers or have their workers work fewer hours to produce less.
Detailed explanation-4: -An example of contractionary fiscal policy would be to decrease government spending on goods and services.
There is 1 question to complete.