Which one of the following accurately states the view of activists who favor discretionary stabilization policy?
a. Neither monetary nor fiscal policy will exert an impact on the real level of economic activity.
b. Since we have only limited ability to forecast the future direction of the economy, the best policy is to do nothing.
c. Our ability to forecast the future direction of economic activity is quite good, and therefore, discretionary macroeconomic policy is now capable of eliminating fluctuations in the business cycle if policy makers would follow the advice of leading economists.
d. The index of leading indicators and other forecasting tools provide policy makers with valuable information that permits them to institute stabilizing changes in macroeconomic policy.
D
You might also like to view...
How does price serve as a rationing mechanism in a market economy? Explain.
What will be an ideal response?
Which of the following is included in the capital account in the BOP?
A) US-owned assets abroad B) US-owned assets in the US C) Unilateral transfers D) All are included in the capital account.
Which of the following is a statement of positive economics?
a. I hope unemployment comes down soon. b. President X's way of dealing with unemployment is better than President Y's. c. I think everyone should sacrifice to reduce the deficit. d. If taxes are reduced, unemployment will drop.
Distinguish a direct and an inverse or negative relationship. Provide an example of each type of relationship