The Direction of Discretionary Fiscal Policy Cannot Be Examined by a Simple

question 58

Multiple Choice

The direction of discretionary fiscal policy cannot be examined by a simple look at the changes in the actual budget deficits or surpluses.This is because:

• A)those changes may reflect the changes in the general price level.
• B)those changes may reflect automatic changes in the tax revenues as a result of change in GDP.
• C)those changes may reflect the changes in the tax revenues as a result of change in imports.
• D)it is impossible to calculate the changes in the actual budget deficits or surpluses.