Which of the following has been cited by economists as a drawback of fiscal policy in comparison to monetary policy?

Question

BlackTom AI · Accepted Answer

To analyze the question, we need to assess what economists cite as drawbacks of fiscal policy relative to monetary policy.
Option 1: 'Lags involved in the implementation of the policy.' This is a common critique: fiscal policy often faces political and administrative delays from recognition to passage to implementation, which can blunt timely stabilization effects.
Option 2: 'Crowding out of private sector borrowing.' When the government runs deficits and borrows to finance spending, it can raise interest rates or absorb financial market resources, potentially reducing or crowding out private investment and consumption financed by credit.
Option 3: 'Crowding out of real resources.' Large-scale fiscal stimulus can bid up prices or redirect scarce real resources (labor, capital) toward government projects, potentially reducing resources available for private sector activities or altering their allocation unfavorably.
Option 4: 'All of the above.' If each of the preceding statements is a recognized drawback, then the combined option accurately reflects the consensus that fiscal policy can suffer from lags and crowding effects in both financial and real resource dimensions.
Option 5: 'None of the above.' This would imply that none of the listed items are drawbacks, which contradicts the established economic critique of fiscal policy in comparison to monetary policy.
In summary, the first three options describe specific drawbacks commonly cited by economists, and the fourth option aggregating them as a whole aligns with that perspective. The final option rejects all of them, which is inconsistent with the standard critique. The reasoning for each option shows how these issues arise and why they are regarded as drawbacks in the fiscal policy context.

ECN 001B B01-B04 FQ 2025 Final Examination

Which of the following has been cited by economists as a drawback of fiscal policy in comparison to monetary policy?

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ECN 001B B01-B04 FQ 2025 Final Examination

Which of the following has been cited by economists as a drawback of fiscal policy in comparison to monetary policy?

查看解析

登录即可查看完整答案

类似问题

Fiscal policy refers to the idea that changes in:

Consider the following graph. Suppose the economy is currently at a point like A. Assume the central bank in this economy remains idle. What type of policy can the Government conduct to reach point B?

______________ are changes in federal taxes and government purchases that are intended to achieve macroeconomic policy goals, and ______________ are changes in federal taxes and government spending that respond to the Business Cycle without direct government action.

Which of the following government fiscal policy actions would increase the public debt?

Country D faces rising unemployment after a banking crisis that undermined business confidence, while at the same time the Stability and Growth Pact holds. Which of the following best captures this country's policy circumstances?

The pandemic-induced economic crisis led to which unprecedented fiscal development?

更多留学生实用工具

希望你的学习变得更简单

are changes in federal taxes and government purchases that are intended to achieve macroeconomic policy goals, and are changes in federal taxes and government spending that respond to the Business Cycle without direct government action.