Which Statement(s) Is/are TRUE? I

question 172

Multiple Choice

Which statement(s) is/are TRUE? I. One potential problem associated with attempting to cyclically balance the budget is that politicians often do not want to raise taxes or cut spending.
II) When attempting to cyclically balance the budget, politicians can depend on the fact that once policymakers predict the length and intensity of one cycle, it applies to all cycles.
III) One potential problem associated with attempting to cyclically balance the budget is that it requires policymakers to accurately predict the length and intensity of the cycle.

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, II, and III

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Definitions:

Binding Price Ceiling

A government-imposed limit on how high a price can be charged for a product that is set below the market equilibrium price, causing shortages.

Surplus

A situation in which the quantity of a good or service supplied exceeds the quantity demanded, often leading to a decrease in price.

Ration

The controlled distribution of scarce resources, goods, or services.

Equilibrium Price

Equilibrium price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded.