Multiple Choice
Which of the following is not a weakness of fiscal policy as a tool of economic stabilization?
A) It is ineffective in dealing with stagflation.
B) Its correct implementation depends on an accurate estimate of potential output.
C) It is subject to lags.
D) It affects only aggregate demand but does not have any impact on aggregate supply.
E) Households may not respond to changes they perceive as permanent.
Correct Answer:
Verified
Correct Answer:
Verified
Q21: Which of the following is true of
Q22: The effect of a change in net
Q23: Which of the following best describes the
Q24: All of the following are likely to
Q25: A decrease in net taxes during a
Q27: Figure 11.2 shows the relationship between the
Q28: A $0.2 trillion increase in government purchases
Q29: Which of the following are components of
Q30: The one-time tax cuts used by the
Q31: The exact change in equilibrium output due