When an economy is at full-employment, the impact of expansionary fiscal policy is limited by the nation's _____ constraint.
A) budget
B) inflation
C) money
D) resource

Question

Quizplus · Accepted Answer

When an economy is at full employment, expansionary fiscal policy is limited by the resource constraint because all resources (labor, capital, etc.) are already fully utilized, and increasing demand further can lead to inflation rather than an increase in output.

When an Economy Is at Full-Employment, the Impact of Expansionary