When Using Discretionary Fiscal Policy to Counter a Fluctuation in the Economy

question 61

Multiple Choice

When using discretionary fiscal policy to counter a fluctuation in the economy, policymakers should

• A)make sure the policy is carried out in a timely manner.
• B)use government purchases as an instrument only if the economy is in a recession.
• C)use taxes as an instrument only if the economy is in a boom.
• D)make sure that changes in government purchases will have an effect on real GDP.
• E)make sure that transfer payments are held constant.

---

Definitions:

Chronic Obstructive Pulmonary Disease (COPD)

A group of progressive lung diseases, including emphysema and chronic bronchitis, characterized by airflow obstruction and breathing-related problems.

Paroxysmal Nocturnal Dyspnea

A condition characterized by sudden, severe shortness of breath at night, often waking the person from sleep, commonly associated with heart failure.

Tachycardia

A condition where the heart rate exceeds the norm for an individual's age, resting at over 100 beats per minute.

Orthopnea

Difficulty in breathing that occurs when lying down and is typically relieved by sitting or standing up, often associated with heart failure.