Many economists think discretionary fiscal policy is of limited effectiveness in stabilizing the economy because: 1) the multiplier effects associated with fiscal policy take a long time; 2) changes in government spending and taxation are too small in relation to the size of the economy to have much effect; 3) there are long and uncertain lags in implementing fiscal policy. A. 1 only. B. 2 only. C. 3 only. D. 1 and 2. E. 1 and 3. F. 2 and 3.

Many economists think discretionary fiscal policy is of limited effectiveness in stabilizing the economy because: 1) the multiplier effects associated with fiscal policy take a long time; 2) changes in government spending and taxation are too small in relation to the size of the economy to have much effect; 3) there are long and uncertain lags in implementing fiscal policy. A. 1 only. B. 2 only. C. 3 only. D. 1 and 2. E. 1 and 3. F. 2 and 3.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 45CTQ: Is expansionary fiscal policy more attractive to politicians who believe in larger government or to...

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