Which of the following is not a valid criticism of discretionary fiscal policy?
A)The 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 of discretionary fiscal policy, as fiscal policy can be effective during periods of inflation or recession, not just stagflation. The other options, A, B, D, and E, are valid criticisms of discretionary fiscal policy, as they highlight various challenges and limitations that can impede its effectiveness.

Which of the Following Is Not a Valid Criticism of Discretionary