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:
Verified
Q1: If tax revenues are $230 billion and
Q2: The greater the tax wedge, the--------------------the amount
Q4: Increasing the income tax rate--------------------the--------------------
A)decreases; supply of
Q5: Q6: The national debt is the amount Q7: The standard view in economics is that Q8: The national debt can only be reduced Q9: Discretionary fiscal policy is handicapped by Q10: If the government uses fiscal policy to Q11: ![]()
A)by which
A)law-making time![]()
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