Which of the following is not a valid criticism of discretionary fiscal policy?
A)Implementation of fiscal policy is sometimes difficult.
B)Time lags in fiscal policy are long.
C)Fiscal policy works only during periods of stagflation.
D)Fiscal policy often affects only current income,but many economic decisions are made on the basis of permanent income.
E)Fiscal policy might have undesirable long-term effects on aggregate supply.

Question

Quizplus · Accepted Answer

The statement that fiscal policy works only during periods of stagflation is not a valid criticism because fiscal policy is designed to stabilize the economy during both recessions and inflations.

Which of the Following Is Not a Valid Criticism of Discretionary