It will be difficult to institute fiscal policy in a stabilizing manner because politicians will find
a. it more attractive to raise taxes than to increase spending.
b. it attractive to increase taxes during a recession, but they will be reluctant to reduce them during an expansion.
c. budget deficits attractive during a recession, but they will be reluctant to run budget surpluses during an expansion.
d. budget surpluses attractive during a recession, but they will be reluctant to run budget deficits during an expansion.
C
You might also like to view...
Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per year, but he now pays himself $25,000 per year while he is building the new business
What is the economic cost of the time he contributes to the new business? A) $25,000 per year B) zero C) $70,000 per year D) $45,000 per year
Foreign aid often becomes a source of discretionary funds that benefit poor people in developing countries and not the countries' leaders
a. True b. False
Why might an equation that has always predicted accurately in the past prove to be wrong following a policy change?
a. Because the policy may change people's behavior and invalidate the equation. b. Because people's expectations may cease to be rational. c. Because uncertainty means that every equation contains some degree of error. d. Because the policy change may affect economic variables not contained in the equation.
The GDP of a country can be derived by summing
a. the expenditures on final user goods and services produced domestically during the year. b. the payments to employees and owners of capital resources and then subtracting depreciation and indirect business taxes. c. the market value of all goods and services produced domestically during the period and then subtracting net exports from that figure. d. the income payments to the resource suppliers and net exports.