When government decides to use fiscal policy:

Question

Quizplus · Accepted Answer

Fiscal policy involves changing government spending and/or taxes to affect the economy. It may take time to implement because it requires approval and implementation processes. It is not always readily available and the process may not necessarily be expedited. The effectiveness of fiscal policy depends on the circumstances and may not always keep the economy closer to potential GDP than it otherwise would be.

When Government Decides to Use Fiscal Policy