Which of the Following About Fiscal Policy Is True

question 138

Multiple Choice

Which of the following about fiscal policy is true?

• A) Modern forecasting methods make it relatively easy to time fiscal policy changes in a manner that will help stabilize the economy.
• B) Legislative action is necessary if automatic stabilizers are going to smooth the ups and downs of the business cycle.
• C) Proper timing of changes in discretionary fiscal policy is both crucially important and difficult to achieve.
• D) Both the crowding-out and new classical theories indicate that expansionary fiscal policy will exert a powerful impact on aggregate demand.

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Definitions:

Dramatic Decline

Represents a swift and significant decrease or deterioration in the condition, value, or performance of something.

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Complex foreign alliances that potentially lead a country into unintended or unwanted conflicts, a term famously warned against by President George Washington.

Workingman's Party

A historical political party in the United States that advocated for the interests and rights of laborers.

Political Action

Activities undertaken to influence government policy or elections, including lobbying, campaigning, and participating in protests or demonstrations.