Countercyclical discretionary fiscal policy calls for:
A. surpluses during both recessions and periods of demand-pull inflation.
B. deficits during recessions and surpluses during periods of demand-pull inflation.
C. deficits during both recessions and periods of demand-pull inflation.
D. surpluses during recessions and deficits during periods of demand-pull inflation.
Ans: B. deficits during recessions and surpluses during periods of demand-pull inflation.
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Because of the lag of the effects of changes in monetary policy and the failure of forecasters to anticipate supply-side shocks as well as changes in money demand or velocity, activist policy changes have tended at times during the mid-1970s to
A) accelerate inflation during expansions. B) increase unemployment during recessions. C) accelerate inflation and increased unemployment. D) dampen inflation and decrease unemployment.
Monetary policy actions are determined by the
A) Federal Open Market Committee. B) New York Federal Reserve Bank. C) President of the United States. D) U.S. Congress.
If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:
A. 1.2 percent. B. 11 percent. C. 1 percent. D. -1 percent.
Free trade agreements between the United States and Canada started with the auto industry in the year 1965
Indicate whether the statement is true or false