A major complication with fiscal policy to control aggregate demand is the
A)inability to agree on macroeconomic goals.
B)accuracy of modern forecasting models.
C)inability to change aggregate demand with fiscal tools.
D)constantly changing investment and net exports because of other events.

Question

Quizplus · Accepted Answer

Fiscal policy is one of the tools that can be used to control aggregate demand in the economy. However, it is often complicated by the constantly changing investment and net export trends due to a variety of external factors such as changes in global trade patterns, changes in consumer behavior, or changes in technology. As a result, it can be challenging to accurately predict the impact of fiscal policy on the economy and make effective decisions about when and how to use it.

A Major Complication with Fiscal Policy to Control Aggregate Demand