Fiscal policy affects the economy
A)only in the short run.
B)only in the long run.
C)in both the short and long run.
D)in neither the short nor the long run.

Question

Quizplus · Accepted Answer

Fiscal policy, which involves government spending and taxation, impacts the economy in both the short and long run. In the short run, it can stimulate or slow down economic activity, while in the long run, it can affect the overall growth potential of the economy and influence factors like investment and savings.

Fiscal Policy Affects the Economy