The use of fiscal policy to stabilize the economy is limited because

Question

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Fiscal policy can be slow to implement because it involves the legislative process, which can be difficult to coordinate and time-consuming. This means that by the time fiscal policy changes are implemented, the economy may have already stabilized or moved in a different direction. Option A is incorrect because fiscal policy can have a significant impact on aggregate demand, especially during times of economic downturns. Option B is incorrect because changes in government spending and tax rates can also impact interest rates, particularly through their effect on inflation expectations. Option D is incorrect because the CRA is responsible for implementing tax changes, not resisting them, and tax code modifications are a routine part of their job. Option E is incorrect because the Constitution Act of 1982 grants the federal government broad powers to tax and spend for the general welfare.

The Use of Fiscal Policy to Stabilize the Economy Is