Which of the Following Is NOT an Argument in Favour

question 9

Multiple Choice

Which of the following is NOT an argument in favour of a rule- based approach to economic policy?

• A) time lags between the implementation and the effect of fiscal policy
• B) time lags between the implementation and the effect of monetary policy
• C) destabilising political behaviour
• D) random shocks to the economy caused by external factors

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Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.

Marginal Cost

The alteration in overall expenses that occurs when the production volume is increased by one unit.

Marginal Cost Curve

A curve that illustrates how the cost of producing an additional unit of a good changes as the output level is increased.

Fixed Costs

Costs that do not vary with the level of output or activity, such as rent, salaries, or loan payments.