Answered step by step
Verified Expert Solution
Question
1 Approved Answer
One potential problem with using fiscal policy to close recessionary output gaps is that: Group of answer choices it may be offset by automatic stabilisers.
One potential problem with using fiscal policy to close recessionary output gaps is that:
Group of answer choices
it may be offset by automatic stabilisers.
sustained government deficits can be harmful to long run economic growth.
decreased government spending can cause inflationary pressure to build.
reduction in interest rates can reduce savings, and therefore investment.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started