One Drawback in Using Fiscal Policy as a Stabilization Tool

question 28

Multiple Choice

One drawback in using fiscal policy as a stabilization tool is that fiscal policy:

• A)affects potential output as well as planned aggregate expenditure.
• B)effects are frequently offset by automatic stabilizers.
• C)is too flexible to use to close output gaps.
• D)is not useful for dealing with prolonged episodes of recession.

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Definitions:

Anticipates Objections

The act of predicting and preparing for potential counterarguments or negative responses in advance of presenting an idea or proposal.

Negative Elements

Components or aspects that contribute to a negative outcome or sentiment.

Immediate Action

A call to prompt or urgent response or decision-making, typically following the provision of information or instructions.

PAIBOC

An acronym for Purpose, Audience, Information, Benefits, Objections, and Context, which are key considerations in effective communication planning.