Which of the Following Is a Consensus View Among Economists

question 46

Multiple Choice

Which of the following is a consensus view among economists with regard to fiscal policy?

• A) Changes in fiscal policy exert a strong influence on real output, just as the basic Keynesian model suggests.
• B) Expansionary fiscal policy will not help promote recovery from a recession.
• C) Restrictive fiscal policy is a potent anti-inflationary weapon.
• D) Since changes in discretionary policy are difficult to time correctly, fiscal policy should not be altered in response to each minor disturbance.

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Definitions:

Inventory

The total amount of goods and materials held by a company intended for sale or production.

Gain on Bargain Purchase

The financial benefit that occurs when a company acquires another entity for a price below the fair value of its net assets.

Pre-acquisition Entries

Journal entries made to account for the assets and liabilities of a company before it is acquired by another entity.

Bonus Share Dividend

A reward to shareholders in the form of additional shares instead of cash, based on the number of shares already held, often issued from a company's accumulated reserves.