Countercyclical Fiscal Policy Is Risky Because

question 133

Multiple Choice

Countercyclical fiscal policy is risky because

• A)it tends to increase the national debt.
• B)real GDP is likely to be close to potential GDP by the time the policy takes effect.
• C)it tends to have no effect on unemployment.
• D)it tends to make recessions more severe.
• E)it tends to result in higher inflation.

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Definitions:

Overhead Costs

Overhead Costs are indirect expenses related to the day-to-day operations of a business, which are not directly tied to specific product production or services, such as rent, utilities, and administrative salaries.

Standard Hours

The set amount of time expected to complete a task or produce a good, used in planning and measuring efficiency.

Price Variance

The difference between the actual cost of a good or service and its planned or budgeted cost.

Material A

Material A most likely refers to a specific type of raw material used in production processes, identifiable by a unique characteristic or designation.