Critics of macroeconomic stabilization policies argue that
a. economists are unable to influence policy.
b. stabilization policies often do more harm than good.
c. stabilization theory has no practical effect.
d. policy makers need practical advice, not theory.
b
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Which of the following is NOT a monetary policy goal?
A) keeping long-term interest rates moderate B) maintaining stable prices C) keeping a high exchange rate for the dollar D) promoting maximum employment E) All of the above are monetary policy goals.
Suppose the economy is producing below potential GDP and the Federal Reserve implements the appropriate change in monetary policy, but not until after the economy has started to recover from the recession. In this situation there is a real danger that
A) the Fed's expansionary policy will result in too small of an increase in GDP. B) the Fed's expansionary policy will result in too large of an increase in GDP. C) the Fed's contractionary policy will result in too large of a decrease in GDP. D) the Fed's contractionary policy will result in too small of a decrease in GDP.
According to the text, the federal government spends the most taxpayer-provided funds regulating which area of the economy?
A) the environment B) finance and banking C) consumer safety and health D) transportation
If the MPC increases in value, what will happen to the slope of the consumption function?
A. The slope will decrease and the consumption function will become flatter. B. The slope will decrease and the consumption function will become steeper. C. The slope will increase and the consumption function will become steeper. D. The slope will increase and the consumption function will become flatter.