Answered: Increasing government spending

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 18CTQ: The U.S. government has shut down a number of times In recent history Explain how a government...

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1. Increasing government spending when the economy is in a recession is an example of:

	A.	active monetary policy
	B.	active fiscal policy
	C.	passive monetary policy
	D.	passive fiscal policy

2. Because monetary and fiscal lags are long and variable:

	A.	stronger policies must be used
	B.	successful stabilization policy is completely impossible
	C.	attempts to stabilize the economy are often destabilizing
	D.	policy must be completely passive

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