One Advantage of Automatic fiScal Policy Over Discretionary fiScal Policy

question 331

Multiple Choice

One advantage of automatic fiscal policy over discretionary fiscal policy is that automatic fiscal policy

• A) makes the actual budget a better reflection of the condition of the economy than the standardized budget.
• B) does not produce a cyclical deficit, as discretionary policy does.
• C) is not subject to the timing problems of discretionary policy.
• D) has a greater multiplier effect than discretionary policy.

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Definitions:

Gratuitous Agents

Individuals who voluntarily act on behalf of someone else without receiving any compensation in return.

Capacity

The legal ability or competency of an individual or entity to enter into binding contracts, including being of legal age and sound mind.

Delegable Obligations

Responsibilities or duties that can be transferred from one party to another, typically within a contract or legal agreement.

Authorized Agent

an individual or entity that has been legally empowered to act on behalf of another person or entity in business transactions or legal matters.