Which statement about fiscal policy is not true?
- it is used to address recessionary as well as inflationary economies
- it includes transfer payments
- in includes taxes
- it includes government spending
- it involves a change in the size of the money supply
- it includes transfer payments
- in includes taxes
- it includes government spending
- it involves a change in the size of the money supply
Related textbook solutions
Related questions
Which of the following statement(s) about fiscal policy is/are true?
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A fiscal policy action to close a recessionary gap is to decrease taxes |
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Fiscal policy may require time before it takes effect (lags) |
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Expansionary fiscal policy can be achieved by increases in transfer payments and decreasing government purchases to pay for it. |
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One potential problem with using fiscal policy to close recessionary output gaps is that sustained government deficits can be harmful to long-run economic growth. |
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Fiscal policy may affect potential output as well as potential spending. |
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The choices of government spending have little effect on fiscal policy since government spending is tied directly to the business cycle through Y=C+I+G+NX. |
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A fiscal policy action to close an expansionary gap is to decrease government purchases |
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Balanced budget fiscal policy is more effective than borrowing or re-paying government debt. |
