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:

Tax Burden

The overall impact of taxes on an individual's, corporation's, or economy's financial performance and well-being.

Tax Imposed

A financial charge or levy instituted by governmental authorities on individuals, transactions, or properties to generate revenue.

Buyer Bears

This concept refers to the condition in which the purchaser is responsible for any additional expenses that arise after a purchase agreement, such as repair or maintenance costs.

Price Wedge

The difference between the price paid by buyers and the price received by sellers, often resulting from taxes, subsidies, or other interventions in the market.