A Major Complication with Fiscal Policy to Control Aggregate Demand

question 43

Multiple Choice

A major complication with fiscal policy to control aggregate demand is the

• A)inability to agree on macroeconomic goals.
• B)accuracy of modern forecasting models.
• C)inability to change aggregate demand with fiscal tools.
• D)constantly changing investment and net exports because of other events.

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Definitions:

U.S. Government Agency

A governmental body within the United States that operates under specific regulatory or administrative purposes, either at the federal, state, or local level.

Limited Liability

A legal structure that limits the financial liability of the owners of a business to their investment in the company.

Indefinite Business Life

A term indicating that a company or asset is expected to operate or remain useful without a foreseeable limit or end date.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders. It can own assets, incur liabilities, and is subject to taxation.