Those Who Favor a Passive Approach to Policy Believe That

question 125

Multiple Choice

Those who favor a passive approach to policy believe that _____

• A) discretionary monetary policy can be used to help an economy since monetary policy lags are short.
• B) discretionary fiscal policy can be used to help an economy since fiscal policy lags are short.
• C) lags associated with implementing policies are too long and unstable for discretionary policy to be effective.
• D) despite the lags involved, implementing discretionary policy is preferable to inaction.
• E) automatic stabilizers cannot be used to help an economy since monetary policy lags are short.