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.

---

Definitions:

Federal Government

The national government of a federal country, where powers are divided between central government authorities and constituent political units (states or provinces).

Nationalized

The process by which private assets or industries are transferred to government ownership and control.

Conservationists

People or organizations that support the conservation and safeguarding of natural habitats and animal life.

Natural Resources

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.