Which of the following best illustrates the use of discretionary fiscal policy?
a. Congress providing $1 billion in relief aid for hurricane victims
b. Congress appropriating $400 million to help the needy and the appropriation being financed by a tax on wealth
c. Income tax receipts being smaller because of a decline in real GDP during a recession
d. The Federal Reserve tightening credit when it receives news of accelerating inflation
e. Congress passing a bill authorizing $2 billion in additional spending when it receives news of a deepening recession
e
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Consider two people, Sandy Smith, who earns $25,000 . and Gary Carver, who earns $50,000 . If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays:
a. $10,000 in taxes and Sandy pays $5,000 in taxes. b. $10,000 in taxes and Sandy pays $10,000 in taxes. c. $15,000 in taxes and Sandy pays $5,000 in taxes. d. $15,000 in taxes and Sandy pays $10,000 in taxes. e. $17,000 in taxes and Sandy pays $5,000 in taxes.
Risk is:
A. why the changing value of money is such a challenge. B. to always be avoided, at any cost. C. when the costs or benefits of an event or choice are uncertain. D. None of these statements is true.
A bank is said to be recapitalized when some investor, private or government, provides new equity capital in return for partial ownership.
Answer the following statement true (T) or false (F)
If a monopolistic competitor is maximizing profit, it is producing at a point where marginal cost
A. Equals average total cost. B. Equals price. C. Is less than price. D. Is greater than price.