Is discretionary fiscal policy difficult to conduct when the economy is in recession?
A. No, potential GDP is known and economic models can determine the discretionary stimulus.
B. Yes, because Congress takes time to act, so the law-making time lag occurs.
C. Yes, automatic fiscal policy, which operates in tandem with discretionary fiscal policy, is not always effective.
D. No, the size of the multiplier is known, so it is easy to determine the fiscal stimulus needed.