What Is the Distinction Between Discretionary Fiscal Policy and the Use

question 131

Multiple Choice

What is the distinction between discretionary fiscal policy and the use of automatic stabilizers?  

• A) Only discretionary fiscal policy can stimulate the economy. 
• B) Only automatic stabilizers can stimulate the economy. 
• C) Discretionary fiscal policy, once adopted, is built into the structure of the economy, while automatic stabilizers are NOT. 
• D) Automatic stabilizers, once adopted, are built into the structure of the economy, while discretionary fiscal policy is NOT.

Understand the Keynesian perspective on government spending and economic recovery.

Recognize the role of fiscal policy in addressing economic downturns.

Identify the historical and theoretical context of Keynesian economics.

Understand the difference between beliefs and attitudes.

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Definitions:

Owe Money

The condition of being under obligation to pay or repay someone or something in return for something received.

Chapter 7

A provision under the U.S. Bankruptcy Code that deals with the process of liquidation, where an individual's or company's assets are sold to pay off creditors.

Trustee

An individual or organization appointed to manage and administer property or assets on behalf of others, usually within a trust.

Debtor's Estate

The collective assets and liabilities of a debtor that are subject to administration in a bankruptcy case.