Which of the Following Is Part of the Synthesis View

question 55

Multiple Choice

Which of the following is part of the synthesis view of fiscal policy?

• A) During a severe recession, the best policy is a "balanced budget policy."
• B) During a recession, higher real interest rates and lower net exports will help direct the economy back to full employment.
• C) Since changes in discretionary policy are easy to time, fiscal policy should be altered in response to each minor disturbance.
• D) Automatic stabilizers help reduce the fluctuations in aggregate demand and output.

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Definitions:

Sellers' Costs

The expenses incurred by sellers in producing or procuring goods for sale, including materials, labor, and overhead costs.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that sellers are willing to supply.

Minimum Price

Is the lowest price at which a product or service can be sold, often set by law or regulation to protect producers or consumers.