Currently, the general agreement about a proposed fiscal policy is that:
A)it should be evaluated for its potential positive and negative impacts on long-run productivity growth.
B)only the short -run impact of it on the economy should be evaluated.
C)the politicians should not be worried about either the short-run nor long-run effects of a fiscal policy.
D)it should only be used when the economy is experiencing an inflationary and not a recessionary gap.

Question

Quizplus · Accepted Answer

Evaluating a proposed fiscal policy for its potential positive and negative impacts on long-run productivity growth is important because it ensures that the policy is sustainable and contributes to the overall health of the economy in the long-term. Ignoring the long-term effects of fiscal policy could lead to short-term gains that ultimately harm the economy in the long run.

Currently, the General Agreement About a Proposed Fiscal Policy Is