The Concerns of Economists Who Favor Passive Over Active Policy

question 16

Multiple Choice

The concerns of economists who favor passive over active policy are most closely associated with their:

• A) preference for using monetary policy rather than fiscal policy for stabilization.
• B) view that policy made by rules is superior to policy made by discretion.
• C) belief that shocks to modern economies are not large enough to require any policy response.
• D) doubt that the correct policy will be implemented at the correct time.