All of the following make the use of fiscal policy less attractive EXCEPT
A) that it cannot be effective unless it is accommodated with expansionary monetary policy.
B) the substantial margin of error in the value of the multiplier.
C) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure.
D) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
Question 2
If two countries agree to specialize and trade based on comparative advantage, which of the following is most likely to be true?
A) Both of the countries will consume outside their respective production possibilities curves.
B) One of the countries will end up receiving all of the gains from trade.
C) One of the countries will both consume and produce on its production possibilities curve.
D) Only one of the countries will produce on and consume outside its production possibilities curve.
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