Which of the Following Is Not a Weakness of Fiscal

question 79

Multiple Choice

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

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

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Definitions:

Nonrivalry

A property of goods where one person's consumption does not prevent consumption by others, typically relevant in the context of public goods.

Nonexcludability

Nonexcludability is a feature of public goods where it is not possible to prevent individuals from consuming the good, irrespective of whether they have contributed to its provision.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning no one can be effectively excluded from use and use by one does not reduce availability to others.

Optimal Quantity

The amount of a good or service that yields the highest net benefit to producers and consumers, considering costs and benefits.