Fiscal policy suffers from the problem of:
A) being formulated and implemented by politicians subject to short-run incentives.
B) being slow to implement.
C) being influenced by special interest groups.
D) all of the answers given are correct.

Question

Quizplus · Accepted Answer

Fiscal policy suffers from all of these problems. Politicians often make decisions based on short-term political gains rather than long-term economic goals. Fiscal policy also tends to be slow in implementation, which can make it difficult to respond quickly to changes in the economy. Additionally, special interest groups often lobby for policies that benefit their particular industries or constituencies, which may not be in the best interests of the overall economy.

Fiscal Policy Suffers from the Problem Of