Economists who favor a(n) _____ approach to the federal budget believe that the first priority of policymakers should be to keep the economy at full employment with stable prices.
A) functional finance
B) annually balanced budget
C) cyclically balanced budget
D) laissez-faire

Question

Quizplus · Accepted Answer

Economists who favor a functional finance approach prioritize keeping the economy at full employment with stable prices above achieving a balanced budget. They believe that deficits may be necessary in certain circumstances to achieve full employment and economic stability. The other options, annually balanced budgets and cyclically balanced budgets, prioritize achieving a balanced budget over economic stability. Laissez-faire is a general economic philosophy that favors minimal government intervention in the economy and is not directly related to budget policy.

Economists Who Favor A(n) _____ Approach to the Federal Budget