Government tax and expenditure policies that affect real GDP are called
A) automatic fiscal policy.
B) discretionary fiscal policy.
C) fiscal policy.
D) supply-side policy.
Ans: C) fiscal policy.
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The size of the underground economy would tend to increase if the government of a country
A) increased income tax rates. B) decreased government regulations on businesses. C) legalized prostitution. D) legalized marijuana.
School-based quotas would guarantee that top students at each high school be admitted to state colleges
Indicate whether the statement is true or false
Suppose there is a tax increase. To stabilize output, the Federal Reserve will
a. increase government spending. b. increase the money supply. c. decrease government spending. d. decrease the money supply.
The liquidity-preference model was first introduced in:
A. 2008 by Ben Bernanke. B. 1776 by Adam Smith. C. 1936 by John Maynard Keynes. D. 1970 by John Kenneth Galbraith.