Why is it difficult to implement fiscal policies?
What will be an ideal response?
One reason why fiscal policies are difficult to implement is the presence of lags, which arise due to the time involved in recognizing and responding to economic changes and the time needed for the policies to operate. A second reason is economists have incomplete information about all aspects of an economy, which limits their abilities to accurately predict economic responses to fiscal policies.
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In the Ricardian model, the marginal product of labor:
a. first rises, then falls, as more labor is employed to produce a good. b. first falls, then rises, as more labor is employed to produce a good. c. continuously falls, as more labor is employed to produce a good. d. does not change, as more labor is employed to produce a good.
The above table shows Homer's utility from boxes of doughnuts. If Homer decreases his consumption of doughnuts from 4 boxes to 3 boxes, his
A) total utility and marginal utility will both decrease. B) total utility will decrease, but his marginal utility will increase. C) total utility will increase, but his marginal utility will decrease. D) total utility and marginal utility will both increase.