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.

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Definitions:

Japanese Attack

Refers commonly to the surprise military strike by Japan on Pearl Harbor in 1941, leading to the United States' entry into World War II.

Hawaii

A U.S. state located in the Pacific Ocean, known for its diverse natural scenery, warm tropical climate, and rich cultural history.

Pearl Harbor

The site of a surprise military attack by the Japanese Navy against the United States on December 7, 1941, leading to the U.S. entering World War II.

Franklin Roosevelt

The 32nd President of the United States, known for leading the country through the Great Depression and World War II with his New Deal policies.