Which of the following is the most important argument in favour of a balanced budget fiscal policy approach?Multiple choice question.The government does not have the power to change tax law.Automatic stabilizers increase the impact of a recession.The balanced budget fiscal policy is the best alternative to countercyclical policy.An economy can self adjust without any intervention.

Which argument against countercyclical fiscal policy do many economists feel is the most serious?Multiple choice question.It ignores the effect it has on the government's budget.It has a built in inflationary biasIt can take a lot of time for the economy to feel the impact.It can subject an economy to the crowding out effect.

he most important argument for a balanced-budget fiscal policy is that an economy can return to full employment through what kind of process?Multiple choice question.InterferingSelf-adjustmentInterventionistFull disclosure

The following () fiscal policy is thoroughly counter-cyclical.This is a multi answer question. You can select one or more options as the answer.A.Increases government spending and cuts taxes during a recessionB.Increase government spending and cut taxes when the economy is booming C.Increase government spending and raise taxes when the economy is boomingD.Cut government spending and taxes in a recession

Fiscal policy is NOT often used as a stabilisation tool. However, it does have important roles in the economy. Three of these roles are:Group of answer choicesmanaging collection of taxes, public health and antiterrorism policymanaging public assets, defence projects, and public safetymanaging government monetary policy, inflation and interest ratesmanaging income distribution, demographic change, and public debtmanaging full employmen, price stability and exchange rates.

Assess whether a government should always aim to balance its budgetrather than have a budget surplus or a budget deficit