The drawbacks of fiscal policy include its:
A)potential regional focus
B)direct impact on spending
C)political invisibility
D)relatively long lags
E)equal effect on all regions of the country

Question

Quizplus · Accepted Answer

Fiscal policy involves the government adjusting its spending and taxation policies to influence the overall economy. However, there are often lags between the changes in policy and their impact on the economy, which can be relatively long compared to the speed at which economic conditions can change. This lag time can make it difficult to control and fine-tune the effects of fiscal policy, leading to issues such as inflation or recession. The other choices are not necessarily drawbacks of fiscal policy as they do not all apply universally to all situations.

The Drawbacks of Fiscal Policy Include Its