Fiscal Policy Cannot Be Used to Deal with Inflation on a Long-Term

Multiple Choice

Fiscal policy cannot be used to deal with inflation on a long-term basis because:

A) government cannot lower the growth rate in the money supply indefinitely.
B) there is a limit as to how much government can cut taxes.
C) government may have difficulties on reaching a compromise as to the appropriate policy, a change in taxes or a change in government spending.
D) there is a limit as to how much government can decrease spending.