Respuesta :
The first hurdle faced by a government is recognizing that the economy is facing a problem that could be solved by applying fiscal policy.
What is fiscal policy?
- Fiscal policy is the use of government income collection (taxes or tax cuts) and expenditure to impact a country's economy in economics and political science.
- The use of government revenue expenditures to influence macroeconomic variables arose in response to the 1930s Great Depression when the previous laissez-faire approach to economic management proved ineffective.
- The theories of British economist John Maynard Keynes underpin fiscal policy.
- When fiscal policy is implemented, there are many temporal lags.
- The first challenge that a government has is recognizing that the economy is experiencing a problem that can be handled by fiscal policy.
As the description, itself states, when the first challenge that a government has is recognizing that the economy is experiencing a problem that can be handled by fiscal policy.
Therefore, the first hurdle faced by a government is recognizing that the economy is facing a problem that could be solved by applying fiscal policy.
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