Believers in Fixed Rules Maintain That

question 61

Multiple Choice

Believers in fixed rules maintain that

• A)with accurate forecasts, we can see inflation coming at least one year ahead of time.
• B)the length of stabilization lags is not important because fiscal policy actions are taken quickly and the economy feels the effect on aggregate demand quickly.
• C)we should forget about discretionary policy and put the economy on autopilot, relying instead on automatic stabilizers and the economy's self-correcting mechanism.
• D)the economy's self-correcting mechanism is slow and not very reliable, even with automatic stabilizers.

---

Definitions:

American Psychological Association

A professional organization representing psychology in the United States, promoting research, education, and clinical practice in the field.

William James

An American philosopher and psychologist, often referred to as the father of American psychology, known for his contributions to functionalism.

Margaret Floy Washburn

A prominent early American psychologist known for her work in animal behavior and motor theory development.

Mary Whiton Calkins

An early American psychologist who became the first woman to serve as President of the American Psychological Association.