Discretionary fiscal policy is best defined as:
a. the deliberate change in tax laws and government spending to change equilibrium income.
b. the deliberate manipulation of the money supply to expand the economy.
c. the arbitrary fluctuation in tax laws and budget requirements.
d. the automatic change in certain fiscal instruments when real GDP changes.
e. the policy action taken by the Congress to reduce the federal budget deficit.
a
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When airplanes take off and land at Logan Airport, the residents of East Boston complain about the noise. The same planes make the same noise during the trip to Boston from Paris, but on this run, over the Atlantic
a. the sound is muffled at high altitudes, creating less market failure b. market failure does not apply because it is an international flight c. there are no externalities because there are no third parties d. the positive externalities of the flight outweigh the negative externalities of the noise e. free riders are more numerous so that market failure is eliminated
According to purchasing-power parity, if it took 55 Indian rupees to buy a dollar today, but it took 58 to buy it a year ago, then the dollar has
a. appreciated, indicating inflation was higher in the U.S. than in India. b. appreciated, indicating inflation was lower in the U.S. than in India. c. depreciated, indicating inflation was higher in the U.S. than in India. d. depreciated, indicating inflation was lower in the U.S. than in India.