Economists recognize that governments may encounter a number of significant problems in doing what?

Question

Multiple select question.

Defining fiscal policy

Reviewing fiscal policy

Enacting fiscal policy

Applying fiscal policy

Answer 1

Economists recognize that governments may encounter significant problems in the following areas related to fiscal policy:

1. Defining fiscal policy - Governments may struggle to clearly define what fiscal policy should entail, including decisions about taxation levels and government spending priorities.

2. Enacting fiscal policy - There can be challenges in implementing fiscal policies due to political considerations, administrative capacity, or public resistance.

3. Applying fiscal policy - Even after policies are enacted, effectively applying them in a way that achieves desired economic outcomes can be difficult due to various economic dynamics and unforeseen circumstances.

Therefore, the correct options are:

• Defining fiscal policy
• Enacting fiscal policy
• Applying fiscal policy

"Reviewing fiscal policy" is typically less problematic as it involves analyzing existing policies rather than implementing new ones.