Discretionary fiscal policy involves
a. expansion of government revenues during a period of rapid growth.
b. contraction of government revenues during a recession.
c. automatic adjustments that affect the size of the budget deficit or surplus.
d. an intentional change in taxation or government spending.
e. both a and b.
D
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During a recession, unemployment insurance ensures that:
a. the disposable income of those who are unemployed will increase above the usual level. b. disposable income does not fall by as much as GDP decreases c. disposable income increases as GDP falls. d. the marginal propensity to consume increases. e. the marginal propensity to consume decreases.
The economic system that answers the What, How and For Whom questions using prices determined by the interaction of supply and demand is a:
a. market economy. b. command economy c. soviet economy. d. traditional economy.