In Practice, Discretionary Fiscal Policy Has

question 2

Multiple Choice

In practice, discretionary fiscal policy has

• A)been unsuccessful in offsetting recessions or booms.
• B)been successful in offsetting booms but not recessions.
• C)been successful in offsetting recessions and booms.
• D)been successful in offsetting recessions but not booms.
• E)always had a very adverse effect on the economy.

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Definitions:

Exchange

The act of trading goods, services, or currencies between parties, either directly or through a medium of exchange like money.

Opportunity Cost

The cost of forgoing the next best choice when making a decision.

Muffin

A small, baked item often eaten for breakfast or a snack, typically sweet and sometimes filled with fruit, chocolate, or nuts.

Comparative Advantage

The competence of an individual or a group in executing a certain economic task with greater efficiency than an alternative one.