What are the four major limits to fiscal policy? Select one: poor information, t

Question

What are the four major limits to fiscal policy? Select one: poor information, the multiplier effect, the effect, and election timing aggregate demand defficiency, unemployed resources, long-run expenses, and implementation tag sticky wages, Ricardian equivalence, recongnition tag, and crowding out. crowding out, a drop in the bucket, a matter of , and real shocks When an increase in government spending leads to a decrease in private spending it is called. Select one: bad timing. crowding out. a drop in the bucket. the implementation tag. Quantitative Easing is when Select one: Congerss extends unemployment benefits. The Federal Reserve mandates banks charge lower interest tares. The Federal Reserve buys a wide range of government and private securities in an attempt to increase excess reserves in the banking system The government pays off the national debt to improve investor confidence The Fed's job in conducting monetary policy is made harder by the fact that: Select one: Legally monetary authories are not allowed to change the supply of money, they can only penalize banks that do not lend. monetary policy is usually putting the economy in the opposite direction from fiscal policy the Fed has to operate in real time and information on recessions usually becomes available with a delay. monetary policy is hardly ever effective in influecting bussiness functions

Explanation / Answer

2.

It is b, crowding out

Increasing government spending reduces the necessity of private investments. Government takes such step because of maintaining uniform growth and to crowding out them.

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