A Disadvantage of Functional Finance Is That It

question 43

Multiple Choice

A disadvantage of functional finance is that it:

• A)does not focus on producing the potential level of output in an economy.
• B)increases the level of unemployment during recessions.
• C)allows chronic deficits that magnify into national debt,allowing it to reach an alarming level.
• D)requires that the budget is balanced even during times of war.
• E)magnifies fluctuations in the business cycle.

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Definitions:

Oral Contract

An agreement made through spoken communication between parties, rather than in writing, yet is legally binding.

Project

A project is a planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Eighteen Months

A time period equal to one and a half years.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the involved parties to be enforceable.