During normal economic times, when there is not "excessive" unemployment or inflation, discretionary fiscal policy

A. is not used due to legal restrictions on the ability of Congress to make policy.

B. is a way of effectively spurring economic growth.

C. is used frequently to effectively fine-tune the economy.

D. is probably not very effective due to lags and the uncertainty created by repeated tax policy changes.

Question

Business

Cale Weber

15 September, 11:26

During normal economic times, when there is not "excessive" unemployment or inflation, discretionary fiscal policy

A. is not used due to legal restrictions on the ability of Congress to make policy.

B. is a way of effectively spurring economic growth.

C. is used frequently to effectively fine-tune the economy.

D. is probably not very effective due to lags and the uncertainty created by repeated tax policy changes.

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Answers (1)

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Zoie Fox · Answer 1

The correct answer is D. is probably not very effective due to lags and the uncertainty created by repeated tax policy changes.

Explanation:

Discretionary fiscal policies: are those that governments intentionally apply to influence public revenues or expenses. They have the advantage that they can act directly on the problems but the drawback is that they are usually slow in their application due to the political and institutional procedures required for their implementation. In addition, these policies take time to achieve the objectives and are not always done effectively.