Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to:

What is the reason that stabilization policies do NOT have an immediate effect on an economy?

A) Consumers are slow to catch up on spending. B) Imports come into the country too fast. C) Exports often are not shipped fast enough. D) There is a time lag for policies to take effect.

Explain the argument for why taxing externalities is an economically legitimate distortion

What will be an ideal response?