Implementation of Cyclically Balanced Government Budgets

question 4

Multiple Choice

Implementation of cyclically balanced government budgets

• A)result in larger output gaps than with annually balanced budgets.
• B)requires precise prediction of potential GDP to pinpoint the stages of the business cycle.
• C)eliminates the need for built-in fiscal stabilizers.
• D)is easier with frequent changes in political power.
• E)is successfully practiced in Canada.

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Definitions:

Wisdom Of Crowds

The collective opinion of a group of individuals rather than a single expert, often more accurate than the majority of individual opinions.

Diversity Of Opinion

The presence of varying viewpoints and perspectives within a group or discussion.

Chief Executive Officer

The highest-ranking executive in a company or organization, responsible for making major corporate decisions, managing the overall operations and resources, and serving as the main point of communication between the board of directors and corporate operations.

Risky Shift

A tendency for groups to take greater risks than the same individuals (on average) would have decided to take individually.