Tax and spending policies affect aggregate demand only after some time elapses.Due to these time lags, fiscal policies end up getting based on
A)forecasts on the future state of the economy that are often inaccurate.
B)forecasts on the present state of the economy that are often inaccurate.
C)forecasts on the present state of the economy that are often accurate.
D)all of these.

Question

Quizplus · Accepted Answer

Tax and spending policies have time lags, which means that the impact on aggregate demand may not be seen immediately. As a result, fiscal policies are often based on forecasts of the future state of the economy, which can be inaccurate.

Tax and Spending Policies Affect Aggregate Demand Only After Some