Which of the Following Is a Limitation of Discretionary Fiscal

question 40

Multiple Choice

Which of the following is a limitation of discretionary fiscal policy?
I.lawmaking lags
Ii.estimating potential GDP
Iii.income gap

• A)i only
• B)ii only
• C)iii only
• D)i and ii
• E)i,ii,and iii

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Definitions:

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Annual Sales

The total revenue generated from the sale of goods or services in one fiscal year.

Variable Expenses Per Unit

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs per unit.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, insurance, and salaries, providing predictability in budgeting.