Discretionary Fiscal Policy

question 226

Multiple Choice

Discretionary fiscal policy

• A) may not have desired effects on real GDP because of the time lags.
• B) may not have desired effects on real GDP because it leads to increases in aggregate demand.
• C) may not have desired effects on real GDP because it leads to decreases in aggregate demand.
• D) would have a larger effect on real GDP if the multiplier was smaller.

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Definitions:

Enteric Nervous System

A part of the nervous system that directly controls the gastrointestinal system, functioning independently of the central nervous system.

CNS

CNS, or Central Nervous System, refers to the complex part of the nervous system consisting of the brain and spinal cord, responsible for processing and sending out signals.

Serotonin

A neurotransmitter involved in regulating mood, appetite, and sleep.

Motility

The ability of an organism or fluid to move spontaneously and actively, consuming energy in the process.