What Are the Four Major Limits to Fiscal Policy

question 173

Multiple Choice

What are the four major limits to fiscal policy?

• A) crowding out,a drop in the bucket,a matter of timing,and real shocks
• B) poor information,the multiplier effect,the bandwagon effect,and election timing
• C) sticky wages,Ricardian equivalence,recognition lag,and crowding out
• D) aggregate demand deficiency,unemployed resources,long-run expenses,and implementation lag

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Definitions:

Statement of Owner's Equity

A financial document that shows changes in the equity of a business over a period of time, including contributions, withdrawals, and net income.

Income Statement

A financial report that summarizes the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the balance between what it owns and owes.

Prepared

The state of having something ready for use or consideration, often used in the context of financial documents or plans.