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Which of the Following Are Reasons Why Monetarists Oppose Activist

question 63

Multiple Choice

Which of the following are reasons why Monetarists oppose activist stabilization policies?
I.Monetary policy lags are so long and variable that trying to stabilize the economy using
Monetary policy can be destabilizing.
II.Monetary policy affects a nation's currency exchange rate and affects the nation's competitiveness in the global market.
III.Because of crowding-out effects, fiscal policy has no effect on GDP.
IV.Fiscal policies must be financed by government borrowing or tax increases, both of which affect aggregate demand negatively.


Definitions:

Wage Rate

The amount of compensation paid to an employee per unit of time, often hourly or annually, reflecting the price of labor in a market.

Labor

The effort by humans to produce goods or services in exchange for wages or other forms of compensation.

Total-Product Schedule

A table showing the output or total product resulting from various quantities of inputs or resources, used in production theory.

Marginal Revenue Product

The increase in revenue resulting from the utilization of one extra unit of a factor of production.

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