Which of the following statements best describes government options during a recession?
a. During a recession, the government will want to implement contractionary fiscal policy, but may be unable to do so because such a policy would lead to a budget deficit.
b. During a recession, the government will want to implement discretionary fiscal policy, but may be unable to do so because such a policy would lead to a budget surplus.
c. During a recession, the government will want to implement contractionary fiscal policy, but may be unable to do so because such a policy would lead to a budget surplus.
d. During a recession, the government will want to implement expansionary fiscal policy, but may be unable to do so because such a policy would lead to a budget deficit.
d. During a recession, the government will want to implement expansionary fiscal policy, but may be unable to do so because such a policy would lead to a budget deficit.
You might also like to view...
Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?
A) increase the variety of products that it can produce with a decrease in resources B) consume a combination of goods that lies outside its own production possibilities frontier C) produce a combination of goods that lies outside its own production possibilities frontier D) never have to engage in trade with other nations
When the expenditure schedule is too high, the result is a(n)
a. unemployment surplus. b. inflationary gap. c. recessionary gap. d. budgetary gap.
Refer to the diagram. At output level Q total variable cost is:
A. 0BEQ.
B. BCDE.
C. 0CDQ.
D. 0AFQ.
Investment spending increases during ________, and decreases during ________
A) a deflation; an inflation B) a recession; an expansion C) an expansion; a recession D) a recession; a depression