A political problem with discretionary fiscal policy is the

Question

Quizplus · Accepted Answer

Discretionary fiscal policy can be influenced by political considerations, such as election cycles, leading to the potential for a political business cycle where policymakers implement expansionary fiscal policy to boost the economy prior to an election, but then implement contractionary policy after the election to avoid inflation. This can create instability and uncertainty for businesses and consumers.

A Political Problem with Discretionary Fiscal Policy Is the