One Reason the Government Enacts Fiscal Policy Instead of Waiting

question 144

Multiple Choice

One reason the government enacts fiscal policy instead of waiting for the economy to correct itself is:

• A)the automatic adjustment can take a very long time.
• B)the automatic adjustment means a lower level of potential GDP.
• C)the automatic adjustment will cause permanent inflation.
• D)All of these are true.

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Definitions:

Margin

The difference between selling price and cost of goods sold, often expressed as a percentage of sales, highlighting profitability.

Performance Measures

Metrics used to assess the efficiency and effectiveness of an operation or employee.

Inventory

Materials and products that a business keeps for the ultimate goal of resale or processing.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to the amount of money invested.