Which of the Following Best Describes the Philosophy of Functional

Multiple Choice

Which of the following best describes the philosophy of functional finance?

A) The federal budget should be balanced each year.
B) A federal budget deficit should be permitted only during a business expansion.
C) A federal budget deficit should be permitted only during a recession.
D) Policy makers should focus on keeping the unemployment rate at the natural rate,even if this means budget deficits.
E) Policy makers should be less concerned about budget deficits and more concerned with increasing the natural rate of unemployment.