Can a Counter-Cyclical Fiscal Policy Ever Result in a Balanced

question 78

Multiple Choice

Can a counter-cyclical fiscal policy ever result in a balanced budget?

• A)Yes,unless the economy is experiencing a recessionary gap.
• B)Yes,if the economy is experiencing a recessionary gap.
• C)Yes,if the economy is experiencing a recessionary gap with a budget deficit.
• D)Yes,if the economy is experiencing an inflationary gap with a budget deficit.
• E)Never.The goal of counter-cyclical fiscal policy is annual deficits.

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Definitions:

Average Tax Rate

The portion of total income that is paid as tax, calculated by dividing the total tax amount by the taxable income.

Tax Base

The total amount of assets or revenue that a government can tax to fund its operations and services.

Sectors

Distinct parts or areas within an economy, characterized by a specific kind of activity, such as the agricultural, manufacturing, or service sector.