Author Question: Describe some of the potential problems with using expansionary fiscal policy. What will be an ... (Read 77 times)

123654777 · **on:** Jun 30, 2018

Describe some of the potential problems with using expansionary fiscal policy.

What will be an ideal response?

Question 2

The nation as a whole is better off from trade as long as the gains from the winners exceed the losses from the losers.

Indicate whether the statement is true or false

krakiolit · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Expansionary fiscal policy tends to cause inflation. It is difficult to accurately measure the size of the multiplier. It can cause different effects based on its financing. It is also politically cumbersome in terms of negotiating, enacting, and implementing the changes.

Answer to Question 2

TRUE