There Are Four Limitations to the Effectiveness of Discretionary Fiscal

question 66

Multiple Choice

There are four limitations to the effectiveness of discretionary fiscal policy. Which item below is NOT one of these limitations?

• A)fiscal multiplier
• B)estimating potential GDP
• C)shrinking area of law-maker discretion
• D)economic forecasting
• E)law-making time lag

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Definitions:

Objectivity Concept

An accounting principle ensuring that financial statements are based on verifiable and unbiased evidence.

Financial Statements

Reports that summarize the financial performance and position of a business, including the income statement, balance sheet, and cash flow statement.

Financial Accounting Standards Board

An autonomous body tasked with creating and enhancing financial accounting and reporting norms in the United States.

Securities and Exchange Commission

A US government agency responsible for enforcing federal securities laws, regulating the securities industry, and overseeing the nation's stock and options exchanges.