How people respond to fiscal policy:
A. is fairly mechanical and appears to conform closely to the predictions of macroeconomic models.
B. depends on whether the fiscal policy is financed from borrowing or from budget surpluses.
C. depends on their evaluation of the state of the economy and their expectations about the future.
D. generally reveals consistent irrationality and poorly-formed expectations about the future.
Ans: C. depends on their evaluation of the state of the economy and their expectations about the future.
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