According to the Budget Philosophy of Functional Finance

question 78

Multiple Choice

According to the budget philosophy of functional finance,

• A)the budget should be balanced annually
• B)surpluses should be run during periods of prosperity and deficits should be run during recessions
• C)the government should not worry about whether the budget is balanced but worry instead about reaching the potential output level
• D)the budget should never be in balance,no matter what
• E)the rate of growth in the national debt should equal the rate of growth in the money supply

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Definitions:

Observer Effect

The phenomenon where the act of observing or measuring a system affects the system itself.

Observer Effect

The observer effect refers to changes that the act of observation can make on a phenomenon being observed.

Representative Sample

A subset of a population that accurately reflects the members of the entire population.

Volunteer Bias

The distortion of research results due to differences between those who choose to participate in studies and those who do not.