Which of the Following Is NOT a Weakness of Fiscal

question 104

Multiple Choice

Which of the following is NOT a weakness of fiscal policy?  

• A) Time lags in fiscal policy are long and variable. 
• B) Fiscal policy works only during periods of stagflation. 
• C) Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income. 
• D) Fiscal policy might have undesirable long-term effects on short-run aggregate supply.

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Definitions:

Adjusting Entry

An entry recorded in the books at the period's end to assign earnings and outlays to the correct period.

Liability Account

An accounting record that reflects the amounts a company owes to others, such as loans payable, accounts payable, bonds payable, etc.

Revenue in Advance

Income received by a business for services or goods that will be provided in the future; also known as unearned revenue.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and shareholders' equity.