Discretionary Fiscal Policy May Be Counterproductive Because

Multiple Choice

Discretionary fiscal policy may be counterproductive because:

A) the countercyclical nature of such policies sometimes reduces their effectiveness.
B) in the short run, only monetary policy is effective.
C) increases in the government budget deficit affect economic growth in the long run.
D) the various lags in fiscal policy mean that it may take effect when the economy has already recovered.