The use of discretionary fiscal policy to end a recession is limited because
A. the legislative process is slow.
B. potential GDP changes too rapidly.
C. the real-world multiplier is too small to have an impact on real GDP.
D. in the real world, taxes are not induced.
Answer:A
The use of discretionary fiscal policy to end a recession is limited because
A. the legislative process is slow. B. potential GDP changes too rapidly. C. the real-world multiplier is too small to have an impact on real GDP. D. in the real world, taxes are not induced.