Multiple Choice
Which of the following is NOT a weakness of fiscal policy as a tool of economic stabilization?
A) Fiscal policy is ineffective in dealing with stagflation.
B) The correct implementation of fiscal policy depends on an accurate estimate of potential output.
C) Fiscal policy is subject to lags.
D) Households may NOT respond to changes in fiscal policy that are perceived as permanent.
Correct Answer:
Verified
Correct Answer:
Verified
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