According to Keynesian Economists,the Primary Problem with Using Fiscal Policy

question 47

Multiple Choice

According to Keynesian economists,the primary problem with using fiscal policy as a stabilization tool is that

• A)fiscal policy does not have the effect on output in practice that it should have in theory.
• B)fiscal policy will be effective only if it is funded through lump-sum tax changes.
• C)fiscal policy will be effective only if it is funded through permanent changes in taxes.
• D)fiscal policy is inflexible because a large portion of government spending is planned years in advance and cannot easily be changed.

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Definitions:

John B. Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior.

Brightness

The attribute of visual perception according to which an area appears to emit more or less light.

Mind Functions

Cognitive, affective, and conative processes and activities carried out by the brain, such as thinking, feeling, and willing.

Edward Titchener

A psychologist known for developing structuralism and for his method of introspection.