The Use of Discretionary Fiscal Policy to End a Recession

question 164

Multiple Choice

The use of discretionary fiscal policy to end a recession is limited because

• A) in the real world, taxes are not induced.
• B) the legislative process is slow.
• C) the real-world multiplier is too small to have an impact on real GDP.
• D) potential GDP changes too rapidly.

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Definitions:

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions, often aimed at tapping into one's creativity and innovation.

Convergent Thinking

Narrowing the available problem solutions to determine the single best solution.

Academic Aptitude

The natural ability or skill to learn and understand academic subjects.

Venturesome Personality

A personality trait characterized by a willingness to take risks and try new experiences.