A major problem in developing an activist policy is
A)uncertainty about the magnitude of the dynamic multiplier.
B)uncertainty about the length and variability of policy lags.
C)uncertainty about the costs of various policies.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Developing an activist policy involves making decisions about the appropriate level and timing of government intervention in the economy. However, there are several uncertainties that make it challenging to formulate effective activist policies. These include uncertainty about the size and timing of the multiplier effect, uncertainty about the lags between implementing a policy and its effects on the economy, and uncertainty about the costs and effectiveness of different policy options. Therefore, all of the above options are correct in identifying major problems in developing an activist policy.

A Major Problem in Developing an Activist Policy Is