If Fiscal Policy Is Going to Exert a Stabilizing Impact

question 3

Multiple Choice

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

• A) instituted by the Federal Reserve system.
• B) expansionary during an economic boom but restrictive during a recession.
• C) timed correctly.
• D) passed by a three-fifths majority in Congress.

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Definitions:

Woodrow Wilson

The leader of the United States from 1913 to 1921, the 28th President, who played a pivotal role during World War I and was a staunch supporter of the creation of the League of Nations.

Russian Revolution

A series of political upheavals in Russia in 1917, leading to the overthrow of the Tsarist autocracy and the establishment of a communist government under the Bolsheviks.

Soviet Union

A federal socialist state in Eurasia that existed from 1922 to 1991, known officially as the Union of Soviet Socialist Republics (USSR), and was a major world power during the 20th century.

Anticommunism

Opposition to communism, typically manifested in policies or practices aimed at preventing the spread of communist ideology.