Advocates of Active Stabilization Policies, in Defense of Their Views

question 26

Multiple Choice

Advocates of active stabilization policies, in defense of their views, argue that

• A)stabilization is less necessary than is commonly advocated by monetarists.
• B)discretionary policy in not necessary because automatic stabilizers are sufficient.
• C)perfect stabilization is not possible, but moderate improvements in economic performance are possible, such as the response to the events of September 11, 2001.
• D)All of the above are correct.

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Definitions:

FIFO Inventory Method

A method of accounting for inventory that assumes the first items placed in inventory are the first sold.

Balance Sheet

A document that provides a snapshot of a corporation's assets, debts, and shareholder's equity at a given point in time.

Increasing Unit Costs

Refers to the situation where the cost to produce or purchase a single unit of product rises, often due to inflation, increased material costs, or labor costs.

Direct Material Costs

Costs that are directly attributable to the production of goods, such as raw materials.