The Great Moderation consensus among macroeconomists is that fiscal policy should be used sparingly because:
A) it cannot be effective.
B) of policy lags.
C) it always destabilizes the economy.
D) of the risk of government waste.

Question

Quizplus · Accepted Answer

The Great Moderation consensus suggests that fiscal policy should be used sparingly due to the existence of policy lags, which means that there is a delay between the time a policy is implemented and when its effects are felt in the economy. This delay can make it difficult for policymakers to use fiscal policy effectively to stabilize the economy.

The Great Moderation Consensus Among Macroeconomists Is That Fiscal Policy