Which of the Following Statements About Fiscal Policy Is the Best

question 72

Multiple Choice

Which of the following statements about fiscal policy is the best example of "gross tuning"?

• A)The government continuously alters its spending and taxing plans to hold real GDP at potential.
• B)The government cuts taxes to remove a large and persistent recessionary gap.
• C)The government increases its spending to reduce an inflationary gap.
• D)The government decreases tax rates to decrease an inflationary gap.
• E)The government uses automatic stabilizers to reduce any output gaps.

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Definitions:

Defense Mechanism

Psychological strategies brought into play by the unconscious mind to protect itself from anxiety and unacceptable impulses.

Regression

Regression is a statistical method used to determine the strength and character of the relationship between one dependent variable and one or more independent variables.

Fails An Exam

The outcome in which an individual does not achieve the minimum required score to pass a test assessing knowledge or skill.

Defense Mechanism

Psychological strategies used by individuals unconsciously to protect themselves from anxiety and perceived threats in reality.