The Use of Fiscal Policy Is Limited Because

question 19

Multiple Choice

The use of fiscal policy is limited because

• A) there is never a long enough time lag.
• B) the economy is almost always at full employment.
• C) the President may have different goals than Congress.
• D) time lags associated with fiscal policy may cause the policy to take effect too late to solve the problem it was supposed to address.

---

Definitions:

Absorption Costing

A financial strategy that absorbs all the manufacturing outlays, encompassing direct materials, workforce costs, alongside both adaptable and unchanging manufacturing overheads, into the cost of a product.

Unit Product Cost

The cost allocated to a single unit of product, encompassing direct materials, direct labor, and allocated overhead costs.

Income Statement

A financial report outlining the revenues, expenses, and profits or losses of a company over a specific period.

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent for factory facilities or salaries of permanent staff.