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:

Repaired

The process of fixing or mending something that was broken or damaged.

Incidental Supplies

Items or materials used in the course of medical care or treatment that are not directly related to a specific patient's diagnosis or treatment.

Occasionally Reordered

The process of arranging items or tasks at irregular intervals, rather than on a regular basis.

Thrown Away

Discarded or disposed of, typically referring to objects or materials considered no longer useful or desired.