Fiscal policy is difficult to implement quickly because
A) it requires political negotiations.
B) much of government spending is nondiscretionary and cannot be changed.
C) increases in tax rates affect consumer spending gradually.
D) it requires political negotiations, and much of government spending is nondiscretionary and cannot be changed.
E) it requires political negotiations, and increases in tax rates affect consumer spending gradually.

Question

Quizplus · Accepted Answer

Fiscal policy involves changes in government spending and taxation, which often require political negotiations and consensus, making it slow to implement. Additionally, a significant portion of government spending is nondiscretionary (e.g., entitlement programs), limiting the flexibility to adjust spending quickly.

Fiscal Policy Is Difficult to Implement Quickly Because