One reason the government enacts fiscal policy instead of waiting for the economy to correct itself is the automatic adjustment:

A. will cause permanent inflation.
B. means a lower level of potential GDP.
C. can take a very long time.
D. is generally not supported by government officials.


Answer: C

Economics

You might also like to view...

How does the United States compare to other nations on a per capita scale as far as government production and taxation?

What will be an ideal response?

Economics

If you invest in an "emerging market fund," your money is probably going to a commercial bank, rather than directly to nonfinancial businesses. Why? Why is that probably a good thing?

What will be an ideal response?

Economics

A firm whose production function displays increasing returns to scale will have a total cost curve that is

a. a straight line through the origin. b. a curve with a positive and continually decreasing slope. c. a curve with a positive and continually increasing slope. d. a curve with a negative and continually decreasing slope.

Economics

Over a period of time, a nation's GDP increases by 3 percent at constant prices and by 5 percent at current prices. Other things being equal, the price level changed by about:

a. 2 percent b. 3 percent c. 8 percent d. 5 percent

Economics