A basic objection to increased public works spending when serious unemployment appears likely to develop is that
A) such spending would lead to a budget deficit.
B) such spending would lead to a decline in GDP.
C) all public works projects are wasteful.
D) there is a long lag between authorizing a program and actually spending the money.
E) stabilization policy is more important than the long-run desirability of public works.

Question

Quizplus · Accepted Answer

There is a long lag between authorizing a program and actually spending the money, which means that by the time the spending occurs, the unemployment situation may have already improved, making the spending unnecessary. This is a common objection to public works spending during times of potential unemployment.

A Basic Objection to Increased Public Works Spending When Serious