A difficulty with effective fiscal policy is the:

Question

Quizplus · Accepted Answer

All three options are difficulties with effective fiscal policy. Time lags mean that it takes time for the effects of policy changes to be felt in the economy; the guess as to what potential GDP is means that policymakers may not accurately know how much stimulus is needed; and the lack of relevant information means that policymakers may not have all the necessary data to make an informed decision about how much fiscal stimulus to provide.

A Difficulty with Effective Fiscal Policy Is The