A change in government spending and/or taxes as the result of legislation is called:
A. open market operations of the Federal Reserve.
B. discretionary fiscal policy.
C. balanced budget operations.
D. discretionary monetary policy.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The resource most directly associated with profits is
a. land. b. labor. c. capital. d. enterprise.
Overt collusion is relatively rare because: a. they are illegal in some countries, including the United States. b. members find it difficult to agree on key decisions
c. members frequently have an incentive to cheat on the cartel. d. of all the above reasons.
Which of the following is consistent with the catch-up effect?
a. The United States had a higher growth rate before 1900 than after. b. After World War II the United States had lower growth rates than war-ravaged European countries. c. Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. d. All of the above are correct.