When Using Discretionary Fiscal Policy to Counter a Fluctuation in the Economy

Multiple Choice

When using discretionary fiscal policy to counter a fluctuation in the economy, policymakers should

A) make sure the policy is carried out in a timely manner.
B) use government purchases as an instrument only if the economy is in a recession.
C) use taxes as an instrument only if the economy is in a boom.
D) make sure that changes in government purchases will have an effect on real GDP.
E) make sure that transfer payments are held constant.