Use of Activist Fiscal and Monetary Policy Can Bring Rapid

question 176

Multiple Choice

Use of activist fiscal and monetary policy can bring rapid growth, as was the case in the United States before the 1972 election. One consequence of an activist policy is:

• A) use of macroeconomic policy that stabilizes the economy.
• B) a political business cycle caused by the use of macroeconomic policy to serve political ends.
• C) countercyclical macroeconomic policy designed to help the economy.
• D) crowding out as decreases in government spending push out the private business spending.

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Definitions:

SUTA Tax Rate

The state unemployment tax rate that employers pay to fund unemployment benefits, which can vary based on the employer's industry and experience with layoffs.