A key difference between functional finance and sound finance is that in the functional finance approach, the government has the potential for:
A. a less active role in spending and taxing decisions.
B. more active role in spending and taxing but only during depressions.
C. no role since functional finance holds that on moral principle the budget should be balanced.
D. a more active role in spending and taxing decisions.
Answer: D
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A backward-bending labor supply curve could possibly imply which of the following cases?
A) Leisure is an inferior good. B) Leisure is a normal good. C) Leisure is a normal good at low wages and inferior at high wages. D) None of the above.
When a firm is operating at its minimum efficient scale, its short-run average total cost of production is minimized
a. True b. False
The way income is allocated among the population is called the
A. distribution of income. B. Gini allocation. C. income curve. D. income spread.
"When OPEC increases the supply of oil to the market, the price of gasoline falls." This is an example of
A) a normative statement. B) the failure of opportunity cost to determine prices. C) a positive statement. D) a macroeconomic statement.