Functional finance:
A)is designed to increase the MPC in the interest of greater macroeconomic stability
B)leads to annually balanced budgets
C)treats the government budget primarily as a means of stabilizing the economy
D)is defended by those economists who are most sceptical of fiscal policy's effectiveness
E)leads to cyclically balanced budgets

Question

Quizplus · Accepted Answer

Functional finance treats the government budget primarily as a means of stabilizing the economy, rather than focusing on a balanced budget or increasing the MPC (A and B). It is not typically defended by economists who are skeptical of fiscal policy's effectiveness (D). While cyclically balanced budgets may be a desirable outcome of functional finance, they are not the primary focus (E).

Functional Finance