According to Mainstream Economic Analysis, a Balanced-Budget Rule for Fiscal

question 188

Multiple Choice

According to mainstream economic analysis, a balanced-budget rule for fiscal policy would be

• A)countercyclical.
• B)ineffective.
• C)destabilizing.
• D)pro-growth.

---

Definitions:

Military Build-Up

The process of a nation increasing its military capability through the acquisition of weapons and strengthening of forces.

Expansionary Monetary Policy

A policy adopted by a central bank to increase the money supply and decrease interest rates to stimulate economic growth.

New Deal Policies

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s, aimed at restoring prosperity during the Great Depression.

Monetary Policy

The process by which a central bank, currency board, or monetary authority controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and trust in the currency.