If the Policy Makers Implement a Tax Cut as a Discretionary

question 144

Multiple Choice

If the policy makers implement a tax cut as a discretionary fiscal policy to combat a recessionary gap, it may fail to achieve its objective if:

• A)the households think of it as a permanent policy.
• B)the households think of it as a temporary policy.
• C)the households think of it as a 10 year program.
• D)the households think of it as a loss of revenue for the government.

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Definitions:

Defense Mechanism

Unconscious psychological strategies employed to protect oneself from anxiety or social sanctions and to provide a refuge from a situation with which one cannot currently cope.

Painful Realities

The acceptance or acknowledgment of difficult, distressing, or unpleasant truths or situations.

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Unconsciously Fearful

Pertaining to the experience of fear or anxiety that operates below the level of conscious awareness, influencing behavior and perception without overt acknowledgment.