Discretionary fiscal policy is best described as
A) a deliberate attempt to cause the economy to move to full employment and price stability more quickly than it might otherwise.
B) a deliberate attempt to improve the functioning of free markets.
C) an automatic change in income transfer payments to keep the economy at full employment.
D) the design of a tax system that automatically stabilizes economic activity over time.
Answer: A) a deliberate attempt to cause the economy to move to full employment and price stability more quickly than it might otherwise.
You might also like to view...
Which of the following would supply-side economists advocate?
I. reducing tax rates in order to encourage people to work more II. providing investment tax credits to stimulate capital formation spending III. increasing government spending IV. increasing transfer payments to those who want to be retrained for employment A) I, II, III, and IV B) I, II, and III only C) I, II, and IV only D) I and II only
Suppose that when the price rises by 10% for a particular good, the quantity demanded of that good falls by 20%. The price elasticity of demand for this good is equal to 2.0
a. True b. False Indicate whether the statement is true or false