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Economists and Policy Makers Questioned the Effectiveness of Discretionary Fiscal

Question 43

Multiple Choice

Economists and policy makers questioned the effectiveness of discretionary fiscal policy during the 1970s for all the following reasons except


A) the difficulty of estimating the natural rate of unemployment
B) the time lags involved in implementing fiscal policy
C) the existence of possible feedback effects of fiscal policy on aggregate supply
D) the distinction between current and permanent income
E) the problems of inflation and unemployment were basically solved

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