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One of the shortcomings of fiscal policy is that:
Question options:
it has significant time lags which make it more effective.
it takes effect immediately, thus it is the best policy to use at crunch time.
it affects aggregate demand indirectly through the interest rate.
it has time lags and sometimes it may end up destabilizing the economy as a result of these lags.
it has time lags and sometimes it may end up destabilizing the economy as a result of these lags.

Sagot :

  • It has time lags and sometimes it may end up destabilizing the economy as a result of these lags.

What is fiscal policy?

It is a discipline whose function is to manage and administer the resources of a state, i.e., it is a type of economic policy discipline which is in the hands of the government of a country who controls expenditures, revenues and tax levels.

Through fiscal policy, the government seeks to improve the economic level by controlling the inflows and outflows of money from the market in order to achieve the goals of economic policy.

It should be noted that this type of policy has flaws and one of them is the time lags that are all those deficiencies that affect the economic process.

Learn more about fiscal policy in: https://brainly.com/question/6583917

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