Question

When there is an economic​ downturn, Congress and the President use fiscal policyLOADING... to stabilize real GDP. But the conduct of the fiscal policy involves several time​ lags, such as the recognition time lag that causes a delay in identification of the economic​ problem, the action time lag that is caused by the delay in Congressional approval of the​ policy, and the effect time lag that arises because policy actions take time to exert their full effects on the economy. These time lags could actually cause discretionary fiscal policy to

Answer 1

The correct approach will be "Destabilize real GDP". The further explanation is given below.

Step-by-step explanation:

• Destroy gross Domestic Product (GDP) because by the moment an intervention starts having its consequences.
• The population could already rebound as well as the economic development can drive up gross Domestic product faster than expected, constantly making GDP somewhat sustainable as either a result.