Nondiscretionary Fiscal Policy Relies in Part on

question 231

Multiple Choice

Nondiscretionary fiscal policy relies in part on

• A)spending for national defense.
• B)automatic changes in personal and corporate income tax receipts to stabilize economic activity.
• C)checks and balances established by the United States Constitution.
• D)"do nothing" economic policies,based on the belief that a market economy is stable and self-adjusting.

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Definitions:

Consumer Durable

Long-lasting goods purchased by consumers that are not consumed quickly and provide utility over time, such as appliances and vehicles.

Consumer Nondurable

Goods that are consumed quickly and must be purchased regularly, such as food, beverages, and toiletries.

Service

An intangible commodity that involves providing labor or expertise in exchange for payment.

Stock Market

A public market for the trading of company shares and derivatives at an agreed price; it is a key indicator of economic health.