Which of the Following Explains Why Economic Booms and Busts

question 45

Multiple Choice

Which of the following explains why economic booms and busts cannot be avoided?

• A) The effects of fiscal and monetary policies will never be completely understood.
• B) The time lags of both fiscal and monetary policies make eliminating boom/bust cycles impossible.
• C) Economic booms/busts could be avoided, if politicians would put good economics ahead of good politics.
• D) The economy is always being struck by unavoidable shocks.

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Definitions:

Regulatory Control

The oversight and enforcement of rules and regulations by a governing body to ensure adherence to lawful standards and protect public interests.

Sole Proprietor

The single owner of an unincorporated business, personally responsible for all debts and obligations of the business.

Good Will

The favorable reputation of a business that adds to its value, often considered an intangible asset.

Partnership

A lawful business arrangement involving two or more people who divide management responsibilities and profits.