Which of the following is an example of active fiscal policy?
A. Income tax revenues rise in an inflationary period.
B. Income tax revenues fall in a recession.
C. Congress passes a major tax increase in an inflationary period.
D. Unemployment benefits increase in a recession.
Answer: C
You might also like to view...
Define the following terms and explain their importance to the study of economics. a. public good b. externality c. irreversible decision d. moral hazard e. rent seeking
What will be an ideal response?
The main policy-making body of the Federal Reserve System is the
A) Board of Governors. B) Federal Open Market Committee. C) Federal Reserve Banks. D) member commercial banks.
Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry
a. True b. False Indicate whether the statement is true or false
In a free market economy, current consumption, saving and investment decisions
A) shape the future course of the national economy. B) are necessarily controlled by big businesses. C) require protection from foreign forces if individuals desire wealth accumulation. D) are controlled largely by the government.