If a fiscal policy change is going to exert a stabilizing impact on the economy,it must
A)be expansionary.
B)be restrictive.
C)be timed correctly.
D)keep the federal budget in balance.

Question

Quizplus · Accepted Answer

A fiscal policy change can only have a stabilizing impact on the economy if it is timed correctly. This means that the change should be implemented during a period of economic instability, such as a recession, and should be targeted towards addressing the root causes of the instability. Simply implementing expansionary or restrictive policies or keeping the federal budget in balance may not necessarily have a stabilizing impact if they are not timed correctly or do not address the underlying economic issues.

If a Fiscal Policy Change Is Going to Exert a Stabilizing