The Use of Discretionary Fiscal Policy to End a Recession

question 216

Multiple Choice

The use of discretionary fiscal policy to end a recession is limited because

• A) the legislative process is slow.
• B) potential GDP changes too rapidly.
• C) the real-world multiplier is too small to have an impact on real GDP.
• D) in the real world, taxes are not induced.

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Definitions:

Behavioral Measurements

Techniques and methods used to observe, record, and assess behaviors as a way to understand and predict human actions.

Mischel's Book

Refers to texts by the psychologist Walter Mischel, who is known for his work on personality theory and cognitive-affective approaches.

Situationist

Pertaining to the theory that behavior is determined more by situations and environmental factors than by personal traits.