Solved

A Reason Why Discretionary Fiscal Policy Might Move the Economy

Question 3

Multiple Choice

A reason why discretionary fiscal policy might move the economy away from potential GDP
Instead of toward potential GDP is that


A) government programs are always expansionary.
B) economic forecasts consistently underestimate the impact of fiscal policy.
C) government programs automatically move real GDP away from potential GDP.
D) it is difficult to know whether real GDP is above or below potential GDP.
E) during a recession, politicians prefer increases in government spending over decreasing taxes.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents