Which of the Following Best Reflects the Nonactivist View of Stabilization

question 50

Multiple Choice

Which of the following best reflects the nonactivist view of stabilization policy?

• A) Monetary and fiscal policies exert little impact on the economy.
• B) Discretionary policy changes often make matters worse.
• C) Fiscal policy should be used to help stabilize the economy; monetary policy should not.
• D) Expansionary monetary policy is the primary source of rapid economic growth.

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Definitions:

Counterproductive Projects

Projects or initiatives that have the opposite of the intended effect, often causing more harm than good.

Capital Markets

Financial markets where long-term debt or equity-backed securities are bought and sold, facilitating investment and growth.

Funds Efficiently

The effective and productive management of financial resources, ensuring the highest possible return or outcome with the least waste.

Economic Profit

This refers to the total revenue of a business minus its explicit and implicit costs, representing the true profitability after all costs are accounted for.