ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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One argument often heard against using fiscal policy to tame the business cycle is that the lags associated with getting a fiscal policy implemented are so long that when the program is finally passed and implemented, the
business cycle has moved on to the next phase and the new program may not be necessary and may even be potentially destabilizing at that point. Does this argument seem reasonable? What counterarguments can you
make in support of using fiscal policy?
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Transcribed Image Text:One argument often heard against using fiscal policy to tame the business cycle is that the lags associated with getting a fiscal policy implemented are so long that when the program is finally passed and implemented, the business cycle has moved on to the next phase and the new program may not be necessary and may even be potentially destabilizing at that point. Does this argument seem reasonable? What counterarguments can you make in support of using fiscal policy?
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