Fiscal policy can:

Name: Fiscal policy can:
Brand: Quizplus
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Question

Fiscal policy can:

Quizplus · Accepted Answer

Fiscal policy can have real effects on the economy in the short run, such as decreasing unemployment and increasing output. It can also potentially bring the economy to its long run equilibrium faster than it would correct itself naturally. However, if fiscal policy is too expansionary and increases government spending and/or decreases taxes too much, it can lead to inflation. Therefore, all of the statements are true.

Fiscal Policy Can