Which of the Following Are a Limitation of Fiscal Policy

question 7

Multiple Choice

Which of the following are a limitation of fiscal policy?
I. There is a lag between recognizing that fiscal policy might be needed and when it actually takes effect.
II. Economic forecasts might be incorrect.
III. Monetary policy might counter fiscal policy.

• A) I, II and III
• B) I only
• C) I and II
• D) I and III

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Definitions:

Isoquant

A curve representing all combinations of inputs that result in the production of a specific quantity of output in production theory.

Roller Skates

Shoes or boots with four wheels arranged in a rectangular pattern, allowing the wearer to glide along surfaces for recreation or sport.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production including machinery.

Labor

The human effort, both physical and mental, used to produce goods and services.