Which of the Following Is Not a Weakness of Fiscal

question 79

Multiple Choice

Which of the following is not a weakness of fiscal policy?

• A)Implementation of policy is difficult.
• B)Time lags in fiscal policy are long and variable.
• C)Fiscal policy works only during periods of stagflation.
• D)Fiscal policy often affects only current income,but many economic decisions are made on the basis of permanent income.
• E)Fiscal policy might have undesirable long-term effects on short-run aggregate supply.

---

Definitions:

Statement of Retained Earnings

A financial statement that summarizes the changes in retained earnings for a specific period, including net income, dividends paid, and adjustments.

Income Statement

A financial report summarizing revenues, expenses, and profits over a specified period, showing the financial performance of a company.

Statement of Cash Flows

A financial report that tracks the cash inflows and outflows from operating, investing, and financing activities over a period.

Statement of Cash Flows

A financial overview explaining how modifications in balance sheet accounts and income levels impact cash and cash equivalents, analyzed through operating, investing, and financing operations.