Countercyclical Fiscal Policy Consists of Using Expansionary Fiscal Policy

question 6

Multiple Choice

Countercyclical fiscal policy consists of using expansionary fiscal policy

• A) during times of expansion and contractionary fiscal policy during times of recession.
• B) during times of recession and contractionary fiscal policy during times of recession.
• C) during times of expansion and contractionary fiscal policy during times of expansion.
• D) during times of recession and contractionary fiscal policy during times of expansion.
• E) and contractionary fiscal policy at the same time.

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Definitions:

Principal

In financial contexts, the amount of money originally invested or loaned, excluding any interest or profit.

Liability Problem

An issue arising from being legally responsible for something, especially in terms of debts or legal penalties.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with particular responsibilities, common in relationships such as trustee and beneficiary, or agent and principal.

Federal Government

The national government of a federated country, where powers are divided between central federal authorities and various constituent regions or states.