Lags in the Approval and Implementation of Fiscal Policy

Multiple Choice

Lags in the approval and implementation of fiscal policy

A) weaken fiscal policy as a tool of economic stabilization
B) increase the effectiveness of fiscal policy as a tool of economic stabilization
C) help legislators to better assess what policies are most appropriate to adopt
D) make fiscal policy more responsive to the current economic environment
E) cause fiscal policy to be more effective in changing the level of real GDP than changing the price level