For each of the following scenarios, determine the associated shortcoming of fiscal policy.

Group of answer choices

The current tax cut will definitely be followed by a tax increase later. I should save more now to prepare for the future tax increase.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

Additional government borrowing leads to an increase in interest rate, and households consume less.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

Since data does not come in frequently, the government does not know what happens in the economy.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

Right before this recession, the government believed that the economy would keep growing 5% annually.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

Additional government borrowing leads to a higher interest rate, which makes it more difficult for firms to borrow.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

After a policy is implemented, it can take a very long time for the policy to have any effects on the economy.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

The Prime Minister wanted to put forward a policy to revive the economy. Yet the government officials are debating about the policy. They have been arguing for more than 2 years.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag

Since Tom can get medical treatments from a public hospital for free, he decided not to go to a private hospital.

[ Choose ] recognition lag savings shift crowding out implementation lag impact lag