Which of the following does not limit the effectiveness of discretionary fiscal policy?
A)the difficulty of estimating the natural rate of unemployment
B)time lags involved in enacting appropriate legislation
C)the difficulty of getting an accurate measure of the rate of inflation
D)time lags involved in recognizing the need for fiscal policy
E)the tendency for people to distinguish between temporary and permanent changes in their income

Question

Quizplus · Accepted Answer

The difficulty of getting an accurate measure of the rate of inflation does not directly limit the effectiveness of discretionary fiscal policy, as fiscal policy is more concerned with overall economic activity and employment rather than precise inflation measurement.

Which of the Following Does Not Limit the Effectiveness of Discretionary