In general,the government will have ________ flexibility in implementing counter-cyclical fiscal policy when the outstanding stock of government debt is ________ relative to the size of GDP.

Question

Quizplus · Accepted Answer

The government will have more flexibility in implementing counter-cyclical fiscal policy when the outstanding stock of government debt is small relative to the size of GDP. This is because a smaller debt relative to GDP means the government can more easily borrow additional funds if needed to stimulate the economy or implement other policy measures without facing high borrowing costs or risking fiscal sustainability.

In General,the Government Will Have ________ Flexibility in Implementing Counter-Cyclical