Explain why discretionary fiscal policy is delayed by the time required to recognise conditions, decide on action, implement it, and affect demand.
Which of the following is true about changes in tax rates, changes in the level of government expenditures, and changes in the money supply?
They are automatic stabilizers.
They are tools of discretionary fiscal policy.
They have different lag times between implementation of a policy and its effects on aggregate demand.
They are favored equally by both classical and Keynesian economists to fine-tune the economy.
All are controlled by the Federal Reserve system.
C