Successful Stabilization Policies Are Very Difficult to Implement Because All

question 37

Multiple Choice

Successful stabilization policies are very difficult to implement because all of the following reasons, except:

• A) decision- makers are slow to respond to changes in the economy.
• B) the difference in the length between inside and outside lags.
• C) decision- makers are slow to recognize changes in the economy.
• D) fiscal policy takes time to operate.

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Definitions:

Sensitivity Analysis

A form of analysis that considers the impact of changing one or more inputs or assumptions on the resulting outcome.

Likelihoods

The probabilities or chances of different outcomes occurring.

Probabilities

A statistical measure that quantifies the likelihood of one or more events happening.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and the present value of cash outflows over time.