One advantage of using expansionary fiscal policy rather than relying on automatic adjustment to recover from a recessionary gap is that
A)the economy will overshoot potential GDP and a boom will be underway.
B)inflation will not be as stimulated.
C)price level will rise higher than otherwise.
D)the recovery may be more rapid.
E)the recovery will be slower,thereby causing less disruption.

Question

Quizplus · Accepted Answer

Expansionary fiscal policy can be targeted towards specific areas of the economy, leading to a more rapid recovery than waiting for automatic adjustments to take effect. This can help to minimize the disruption caused by a recessionary gap.

One Advantage of Using Expansionary Fiscal Policy Rather Than Relying