A Problem with the Use of Aggregate Demand Management to Stabilize

question 53

Multiple Choice

A problem with the use of aggregate demand management to stabilize the business cycle is that

• A)monetary policy isn't available to use when interest rates are already rising because of higher inflation.
• B)fiscal policy takes a long time to have any impact on the economy.
• C)monetary policy is difficult to use, because the decision-making process is long and complicated.
• D)the precise amount that output will change in response to monetary or fiscal policy isn't known.

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