Fiscal policy
A) is dangerous in the short run because it crowds out investment spending
B) can change equilibrium GDP in the short run
C) can change equilibrium GDP in the long run
D) can change equilibrium GDP in both the long and the short run
E) is dangerous in the long run because it triggers a multiplier effect

Question

Quizplus · Accepted Answer

Fiscal policy can change equilibrium GDP in the short run by influencing aggregate demand through government spending and taxation.

Fiscal Policy