The Arguments Against the Use of Active Stabilization Policy Include

question 18

Multiple Choice

The arguments against the use of active stabilization policy include all of the following except:

• A)the responsiveness of voluntary unemployment to changes in GDP.
• B)the existence of policy lags.
• C)weak macroeconomic forecasting abilities.
• D)the possibility of policy errors because of limited information.

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Definitions:

Small Stock Dividend

A dividend payment made in the form of additional shares, typically less than 25% of the existing shares.

Retained Earnings

The cumulative amount of net income kept in the company after dividends are paid and not distributed to shareholders.

Market Value

The market value at which you can buy or sell an asset or service right now.

Stock Dividend

A distribution of additional shares of a company to its shareholders, rather than paying a cash dividend.