Which of the following accurately describes a limitation of fiscal policy? The spending multiplier will always be
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Question:
Which of the following accurately describes a limitation of fiscal policy?
The spending multiplier will always be more effective than the tax multiplier because of savings.
The government can have no direct impact on aggregate demand in the economy.
The government can influence the price level but not real output or aggregate demand.
The government has the ability to slow inflation but not close a recessionary gap.
There is always a time lag to discretionary fiscal policy between action and impact.
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