Which of the following is part of the synthesis view of fiscal policy?
A) Automatic stabilizers offset some of the fluctuations in aggregate demand without any government action.
B) Fiscal policy is much less potent than the early Keynesian view implied.
C) The effectiveness of discretionary fiscal policy as a stabilization tool is highly questionable given the difficulties in proper timing.
D) All of the above are correct.
E) None of the above is correct.

Question

Quizplus · Accepted Answer

The synthesis view of fiscal policy incorporates all three of the statements listed. A) Automatic stabilizers are seen as playing a beneficial role in stabilizing aggregate demand without requiring government intervention. B) The synthesis view recognizes that the effects of fiscal policy are not as strong as the early Keynesian view suggested, due to factors such as crowding out and Ricardian equivalence. C) The effectiveness of discretionary fiscal policy is called into question by the difficulties of proper timing and the potential for political factors to interfere with effective implementation.

Which of the Following Is Part of the Synthesis View