Effective fiscal policy can be difficult to enact because:
A) most of the money is lost to corruption.
B) the economy rarely needs fiscal stimulus.
C) the government lacks all relevant information needed to decide the magnitude of change.
D) All of these are true.

Question

Quizplus · Accepted Answer

Fiscal policy involves changes in government spending and taxation to stimulate or slow down the economy. However, it can be difficult to enact effective fiscal policy because the government may not have all the relevant information needed to decide the magnitude of change needed. This can result in the policy not having the intended effect and potentially causing unintended consequences. While corruption and the economy rarely needing fiscal stimulus are also concerns, they are not the primary reason why effective fiscal policy can be difficult to enact.

Effective Fiscal Policy Can Be Difficult to Enact Because