The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on aggregate demand.
B) changes in government spending and tax rates have a small effect on interest rates.
C) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way.
D) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.
Answer: C
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In equilibrium, the real value of household income must equal
A) the real value of output produced by firms. B) the real value of all expenditures. C) the sum of all goods produced in a year. D) net GDP.
Discuss the changes in regulations of financial firms during the 1990 and whether the proposed benefits occurred.
What will be an ideal response?