Final answer:
Government policies may not always work in smoothing out business cycles or recovering from a recession due to time lags, uncertainties in policy decisions, and the complexity of the economy.
Step-by-step explanation:
Government policies aimed at smoothing out business cycles or recovering from a recession may not always work due to several factors.
Firstly, there are time lags and delays involved in implementing fiscal policies. It can take months for government statisticians to produce preliminary estimates of GDP, and even longer for the political process to enact tax cuts or spending increases. By the time these policies are put into effect, the recession may already be over.
Secondly, there are uncertainties in determining the right amount of tax or spending changes that are necessary. Political or economic considerations often influence these decisions, which may result in ineffective policy measures.
Lastly, the complex nature of the economy and the interplay of various factors make it difficult for government policies to have the desired impact. Factors such as consumer and business confidence, market conditions, and global economic trends can all influence the effectiveness of government policies in recovering from a recession.