All of the following,except one,are arguments against the use of counter-cyclical fiscal policy to close a recessionary gap.Which is the exception?
A)Counter-cyclical fiscal policy can be inflationary.
B)Counter-cyclical fiscal policy is subject to serious time lags.
C)Counter-cyclical fiscal policy can increase interest rates and crowd out private investment spending.
D)Counter-cyclical fiscal policy can reduce budget deficits,but this would also lower the exchange rate.

Question

Quizplus · Accepted Answer

Option D does not present a negative argument against the use of counter-cyclical fiscal policy, but rather suggests a potential positive outcome. All other options present concerns about the effectiveness, efficiency, or unintended consequences of counter-cyclical fiscal policy.

All of the Following,except One,are Arguments Against the Use of Counter-Cyclical