Fiscal Policy May End Up Being Destabilizing to an Economy

question 95

Multiple Choice

Fiscal policy may end up being destabilizing to an economy because

• A)there is never a long enough time lag.
• B)the economy is almost always at full employment.
• C)the Prime Minister may have different goals than Parliament.
• D)various time lags associated with fiscal policy cause the policy changes to take effect too late to solve the problem that it was supposed to solve.

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