The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on interest rates.
B) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.
C) changes in government spending and tax rates have a small effect on aggregate demand.
D) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way.
D
You might also like to view...
Limit pricing refers to
A) the fact that a monopoly firm always sets the highest price possible. B) how the price is determined in a kinked demand curve model of oligopoly. C) a situation in which a firm might lower its price to keep potential competitors from entering its market. D) none of the above.
By definition, in the typical firm's short-run production function all inputs are fixed in amount
Indicate whether the statement is true or false