One Advantage of Automatic Fiscal Policy Over Discretionary Fiscal Policy

question 91

Multiple Choice

One advantage of automatic fiscal policy over discretionary fiscal policy is that automatic fiscal policy:

• A) Makes the actual budget a better reflection of the condition of the economy than the Standardized budget
• B) Does not produce a cyclical deficit as discretionary policy does
• C) Is not subject to the timing problems of discretionary policy
• D) Has a greater multiplier effect than discretionary policy

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Definitions:

Infallible Decision Making

An idealized process where decisions are made with absolute certainty and accuracy, leading to perfect outcomes every time.

Relational Leadership Theory

A perspective on leadership that emphasizes the importance of leader-follower relationships, focusing on context, process, and reciprocal influence processes.

Social Order

A set of established patterns of authority, relationships, and social norms that govern the behavior of individuals within a society or group.

Influence Processes

The methods or techniques through which individuals or groups affect the behavior, attitudes, or opinions of others within an organizational context.