Fiscal policy is often difficult to successfully implement because:
A) there is a lag between the time the policy is chosen and when it gets enacted.
B) a decision must be made without all the relevant information.
C) there is a risk of overshooting or undershooting the goal of full employment.
D) All of these are true.

Question

Quizplus · Accepted Answer

All three options are true. There is often a lag between the time a fiscal policy is decided upon and when it is actually implemented, which can make it difficult to respond to economic changes in a timely and effective manner. In addition, fiscal policy decisions are often made without complete information, as it is impossible to fully predict how the economy will respond to a particular policy. Finally, there is always the risk of overshooting or undershooting the goal of full employment, which can lead to unintended consequences like inflation or recession.

Fiscal Policy Is Often Difficult to Successfully Implement Because