Which of the following is a correct conclusion regarding the successful implementation of fiscal policy?
A)Successful fiscal policy would be easy to achieve if Congress would stay out of the economy and permit natural market forces to restore full-employment equilibrium.
B)Successful fiscal policy is difficult to achieve because in the real world, the investment, net exports, and consumption schedules are constantly shifting.
C)Successful fiscal policy is much easier to achieve today because econometric models make economic forecasting much easier.
D)As the income-expenditure model suggests, fiscal policy planners can move GDP to any level they please by changing tax and spending levels.

Question

Quizplus · Accepted Answer

Option A is incorrect as it suggests that Congress should stay out of the economy, which is not always possible as there are often market failures and external factors that require government intervention. Option C is incorrect as while econometric models can aid in economic forecasting, they cannot guarantee successful implementation of fiscal policy. Option D is incorrect as while fiscal policy can have an impact on GDP, there are limits to how much it can be influenced, as shown by the slope of the expenditure line in the income-expenditure model. Option B is correct as it recognizes the challenges inherent in implementing successful fiscal policy due to the constantly shifting investment, net exports, and consumption schedules.

Which of the Following Is a Correct Conclusion Regarding the Successful