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

question 50

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 but is often impractical.

---

Definitions:

Blisspoint

The optimal level of consumption where any further increase would lead to a decrease in overall satisfaction or happiness, often used in food science and economics.

Set Point

A theory suggesting that the body regulates its weight and energy balance through an internal control mechanism located in the hypothalamus.

Probability-Differential Theory

A theory suggesting that the probability of choosing a specific behavior is based on the relative reinforcement of that behavior compared to alternatives.

Premack's Probability-Differential Theory

A theory that suggests that more probable behaviors can serve as reinforcers for less probable behaviors, indicating a hierarchy of preferred activities.