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.

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Definitions:

Unearned Revenue

Money received by a business for services or products yet to be delivered or completed.

Interest Revenue

Income earned from lending funds or investing in interest-bearing financial instruments.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Wages Expense

Costs incurred by a company for the payment of hourly employee wages within a specific accounting period.