Which one of the following is NOT a reason that fiscal policy may fail to obtain its desired outcome?
A) crowding out
B) monetary offset
C) leakages
D) multiplier effect

Question

Quizplus · Accepted Answer

The multiplier effect is actually a mechanism through which fiscal policy can be effective, not a reason for its failure. It describes how an initial increase in spending leads to further increases in income and consumption, amplifying the initial impact of the fiscal policy.

Which One of the Following Is NOT a Reason That