One reason the government will enact fiscal policy instead of waiting for the economy to correct itself is because the automatic adjustment:
A) can take a very long time.
B) leads to a lower level of potential GDP.
C) will cause inflation.
D) causes greater turbulence in the economy.

Question

Quizplus · Accepted Answer

The automatic adjustment process can take a very long time, which may not be desirable if the economy is facing significant issues such as a recession or high unemployment. In such cases, the government may choose to enact fiscal policy to stimulate the economy more quickly.

One Reason the Government Will Enact Fiscal Policy Instead of Waiting