The Case for a "Hands Off" Economic Policy Is Based

question 43

Multiple Choice

The case for a "hands off" economic policy is based on the widely held belief that

• A)Fiscal policy works but monetary policy does not.
• B)Monetary policy works but fiscal policy does not.
• C)Discretionary policy can improve the economy in theory but is often impractical in practice.
• D)Economic theory is inadequate to formulate effective discretionary policy.

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Definitions:

Cash Increase

Refers to the rise in cash and cash-equivalent assets within a business or organization.

Cash Decrease

A reduction in the amount of cash a company has on hand, which can result from expenses, purchases, or withdrawals.

Income Statement

The income statement is a financial statement that reports a company's financial performance over a specific accounting period, showing revenue, expenses, and net income or loss.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and stockholders' equity at a specific point in time.