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Why Is Discretionary Fiscal Policy Considered Risky or Somewhat Uncertain

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Why is discretionary fiscal policy considered risky or somewhat uncertain?


Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefits to society.

Benevolent Social Planner

A hypothetical figure in economics who makes decisions aimed at achieving the best possible outcomes for society overall, considering both efficiency and equity.

Market Power

The ability of a firm or group of firms to significantly control or influence market prices, often due to lack of competition.

Price Discrimination

An approach to setting prices where a provider charges different rates for the same or very similar items in various markets.

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