In the new classical framework, fiscal policy is ineffective as long as policy is anticipated.

Name: In the new classical framework, fiscal policy is ineffective as long as policy is anticipated.
Brand: Quizplus
Rating: 4.8 (39 reviews)

Question

Quizplus · Accepted Answer

In the new classical framework, it is believed that anticipated fiscal policy is ineffective in affecting output or employment because individuals adjust their behavior in anticipation of the policy, neutralizing its impact through the Ricardian equivalence theorem and rational expectations.

In the New Classical Framework, Fiscal Policy Is Ineffective as Long