Which of the following is a major deficiency of fiscal policy as a stabilization tool?
A) Congress is reluctant to make changes in either taxes or expenditures.
B) The Constitution requires the president to submit and Congress to pass a balanced budget.
C) Both political and economic factors make it unlikely that changes in fiscal policy will be timed correctly.
D) A change in fiscal policy exerts major effects on the economy quickly.

Question

Quizplus · Accepted Answer

Both political and economic factors make it unlikely that changes in fiscal policy will be timed correctly. Fiscal policy changes require significant time to be implemented, and there are often delays, especially when there is political gridlock. Additionally, there is a lag between implementing fiscal policy changes and seeing a response in the economy, making it difficult to time these changes correctly.

Which of the Following Is a Major Deficiency of Fiscal