Which of the Following Is Part of the Synthesis View

question 55

Multiple Choice

Which of the following is part of the synthesis view of fiscal policy?

• A) During a severe recession, the best policy is a "balanced budget policy."
• B) During a recession, higher real interest rates and lower net exports will help direct the economy back to full employment.
• C) Since changes in discretionary policy are easy to time, fiscal policy should be altered in response to each minor disturbance.
• D) Automatic stabilizers help reduce the fluctuations in aggregate demand and output.

---

Definitions:

Decreasing Returns To Scale

See Diseconomies of scale.

Economies Of Scope

Exist when the cost of producing two products jointly is less than the cost of producing those two products separately.

Economies Of Scope

Describes cost advantages that businesses experience when they increase the variety of goods or services they offer, utilizing shared operations or resources.

Economies Of Scope

Cost advantages that enterprises obtain due to a larger scope of operations, where producing a wider variety of goods or services results in lower average costs.