Which Statement Is NOT a Major Limit to the Effectiveness

question 186

Multiple Choice

Which statement is NOT a major limit to the effectiveness of fiscal policy?

• A) A single increase in government spending may not be enough to stimulate the economy.
• B) The crowding out effect is transmitted through financial markets.
• C) Fiscal policy is not very effective in combating supply side shocks.
• D) A multiplier effect is associated with changes in spending and taxation.

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