Question

. Describe two problems with fiscal policy.

Answer 1

Answer-Two problems with fiscal policy-

1. Poor information -Fiscal policy can be badly affected if the government is having insufficient or less information, for example, if the government is expecting a recession in the future then they will increase AD, by this if the government expectations gone wrong and the economy grew too fast than the government decision can cause inflation in the economy.

2.Delayed results and political pressure-The results of fiscal policy are delayed due to the government or political pressure.