If a Fiscal Policy Change Is Going to Exert a Stabilizing

question 131

Multiple Choice

If a fiscal policy change is going to exert a stabilizing impact on the economy, it must

• A) add demand stimulus during a slowdown but restraint during an economic boom.
• B) exert an expansionary impact during all phases of the business cycle.
• C) restrain aggregate demand during all phases of the business cycle.
• D) keep the government's budget in balance.