There Are Four Limitations to the Effectiveness of Discretionary Fiscal

question 22

Multiple Choice

There are four limitations to the effectiveness of discretionary fiscal policy. Which item below is NOT one of these limitations?

• A) The fiscal multiplier
• B) The shrinking area of Parliamentary discretion
• C) The legislation time lag
• D) Estimating potential GDP
• E) Errors in economic forecasting

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Definitions:

Colonists

Individuals who settle in a new land or territory while maintaining ties with their parent country, often involved in the establishment of new colonies.

British

Referring to anything related to the United Kingdom or its people, including its culture, history, and political influence.

Responsible

Having an obligation to do something, or the ability to make moral or rational decisions on one's own, often leading to being trusted and relied upon.

Charles III

A monarch who has reigned in several historical periods, known for various reforms and policies, including Charles III of Spain, who implemented enlightened absolutism in the 18th century.