According to Keynesian Economists,the Primary Problem with Using Fiscal Policy

question 47

Multiple Choice

According to Keynesian economists,the primary problem with using fiscal policy as a stabilization tool is that

• A)fiscal policy does not have the effect on output in practice that it should have in theory.
• B)fiscal policy will be effective only if it is funded through lump-sum tax changes.
• C)fiscal policy will be effective only if it is funded through permanent changes in taxes.
• D)fiscal policy is inflexible because a large portion of government spending is planned years in advance and cannot easily be changed.

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Definitions:

Implied Ratification

A form of agreement inferred from actions or behavior, indicating acceptance of previous actions that were not officially authorized.

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The explicit approval or confirmation of an act or agreement, usually after the fact, making it officially valid.

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A broad range of mental health conditions that affect mood, thinking, and behavior, often requiring medical diagnosis and treatment.

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