To Say That Fiscal Policy Is Countercyclical Means That

question 34

Multiple Choice

To say that fiscal policy is countercyclical means that

• A)it is used only during a recession.
• B)cyclical movements in the economy can be offset by fiscal policy.
• C)it is not very effective as a policy tool.
• D)government spending and real GDP are negatively correlated.
• E)it is used only every other year.

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Definitions:

Machines

are mechanical or electronic devices that perform tasks, either automatically or with human input.

Short-Run Total Cost

The total of all costs, both fixed and variable, involved in the production of goods or services in the short run.

Production Function

This concept describes the relationship between inputs used in production and the resulting output.

Labor

The human effort, whether physical or mental, that is used in the production of goods and services.