Why Is It Sometimes Difficult to Use Fiscal Policy to Regulate

question 13

Multiple Choice

Why is it sometimes difficult to use fiscal policy to regulate the economy?

• A) Federal spending cannot be easily adjusted up or down as economic conditions change.
• B) Decisions about how much government should spend are made by a very small group of people.
• C) Changes in spending and taxes can occur very quickly before many economists can agree on what the problem is.
• D) Decisions by Congress to lower the discount rate to federal banks are a cumbersome process.
• E) Checks and balances provided for in the Constitution require agreement among all three branches regarding a course of action.

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