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According to Keynesian Economists,the Primary Problem with Using Fiscal Policy

Question 47

Multiple Choice

According to Keynesian economists,the primary problem with using fiscal policy as a stabilization tool is that


A) fiscal policy does not have the effect on output in practice that it should have in theory.
B) fiscal policy will be effective only if it is funded through lump-sum tax changes.
C) fiscal policy will be effective only if it is funded through permanent changes in taxes.
D) fiscal policy is inflexible because a large portion of government spending is planned years in advance and cannot easily be changed.

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