How Do Advocates of Discretionary Stabilization Policy View Frequent Changes

question 183

Multiple Choice

How do advocates of discretionary stabilization policy view frequent changes in spending and tax policy?

• A)The changes make the economy more difficult to forecast.
• B)The changes make life more difficult and hectic for Congress and the Fed.
• C)The changes smooth out the business cycle, making planning easier.
• D)The changes cause more instability in the economy and make planning more difficult.

---

Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Incremental Net Cash Flows

The difference in a company's cash flows when considering a proposed change, such as an investment or project.

Overhead Costs

Expenses not directly tied to product production, such as rent, utilities, and administrative salaries, essential for running a business.

Distribution Efficiencies

The optimization of processes and resources involved in distributing products or services from the producer to the consumer.