Discretionary Fiscal Policy Is Risky Because It Is Hampered by

question 66

Multiple Choice

Discretionary fiscal policy is risky because it is hampered by

• A)recognition lag, impact lag, and law-making lag.
• B)recognition lag, business cycle lag, and law-making lag.
• C)business cycle lag, impact lag, and law-making lag.
• D)recognition lag, impact lag, and business cycle lag.
• E)recognition lag, inflation lag, and law-making lag.

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various price levels at a given period.

Labor

The effort by humans to produce goods or services in the economy.

Resource Demand Curve

A graphical representation showing the relationship between the price of a resource and the quantity of that resource demanded by firms.

Shift Factors

Variables or conditions that can cause a shift in demand or supply curves, thus changing market equilibrium.