Which of the following limits the effectiveness of fiscal policy?

CA Foundation · Business Economics · MTP · May 2026
Which of the following limits the effectiveness of fiscal policy?
(A) A. Flexible prices
(B) B. Time lag in implementation
(C) C. High tax compliance
(D) D. Balanced budget

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Time lag in implementation

Topics: Public Finance

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