Whether one views the discretionary policies of the 1960s and 1970s as destabilizing or believes the economy would have been less stable without these policies, most economists agree that
A) stabilization policies proved more difficult in practice than many economists had expected.
B) stabilization policies proved not to be inflationary.
C) the nondiscretionary policymakers were right in believing that the private economy is inherently stable.
D) the discretionary policymakers were right in believing that the private economy is inherently stable.
A
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If MPPa/Pa> MPPb/Pb, then the proportions of these two inputs is optimal.
Answer the following statement true (T) or false (F)
The AS/AD model with sticky prices predicts that, in the long run, a reduction of the money supply results in:
a. lower prices and lower output. b. no change in prices and lower output. c. lower prices and no change in output. d. no change in prices or output.
If policymakers do nothing in response to a recessionary gap, what will happen?
A. A rapid movement toward lower unemployment and higher inflation B. A rapid movement toward lower unemployment and lower inflation C. A slow movement toward lower unemployment and higher inflation D. A slow movement toward lower unemployment and lower inflation
The external cost of congestion arises because:
A. travel time increases when there are more cars on the road. B. young drivers take more driving risks than do older drivers. C. crowded highways deteriorate more quickly than do less-traveled highways. D. toll booths slow traffic.