It Will Be Difficult to Institute Fiscal Policy in a Stabilizing

question 29

Multiple Choice

It will be difficult to institute fiscal policy in a stabilizing manner because politicians will find

• A) it more attractive to raise taxes than to increase spending.
• B) it attractive to increase taxes during a recession, but they will be reluctant to reduce them during an expansion.
• C) budget deficits attractive during a recession, but they will be reluctant to run budget surpluses during an expansion.
• D) budget surpluses attractive during a recession, but they will be reluctant to run budget deficits during an expansion.

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Definitions:

Responsibility Center

An organizational unit for which a manager is assigned responsibility over costs, revenues, or assets.

Department Manager

A position responsible for overseeing the operations, productivity, and personnel of a specific department within an organization.

Revenues

The cumulative financial gain acquired by transacting goods or services indispensable to an enterprise's principal undertakings.

Decentralization

The distribution of decision-making powers from a central authority to smaller units or individuals within an organization.