When It Comes to Macro-Policy, Most Economists Now Agree That

question 133

Multiple Choice

When it comes to macro-policy, most economists now agree that

• A) policy should be constantly changing in response to business cycle conditions.
• B) policy changes should exert stimulus during inflationary booms and restraint during downturns.
• C) given our ability to forecast economic conditions, policy changes easily can be implemented in a timely manner.
• D) policy changes are difficult to time correctly, and therefore constant shifts in policy are likely to be a source of economic instability.

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Definitions:

Marginal Cost

The upsurge in total expenditure associated with the fabrication of one further unit of a good or service.

Cartel

A formal agreement among competing firms to control prices, limit output, or divide markets to gain an advantageous market position.

Industry Output

The total production or service provision by companies within a specific industry.

Industry Profit

The total earnings generated by companies within a specific industry after covering all operating costs.