Fiscal Policy Can Be an Inappropriate Macroeconomic Stabilization Tool, Since

question 32

Multiple Choice

Fiscal policy can be an inappropriate macroeconomic stabilization tool, since

• A)it has a larger outside lag than monetary policy
• B)it may have side effects that can distort decisions in the private sector
• C)it will always involve a loss of tax revenue for the government
• D)it has no short-run effects
• E)none of the above

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