Advocates of Active Stabilization Policies, in Defense of Their Views

question 26

Multiple Choice

Advocates of active stabilization policies, in defense of their views, argue that

• A)stabilization is less necessary than is commonly advocated by monetarists.
• B)discretionary policy in not necessary because automatic stabilizers are sufficient.
• C)perfect stabilization is not possible, but moderate improvements in economic performance are possible, such as the response to the events of September 11, 2001.
• D)All of the above are correct.

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Definitions:

Market

A space or system in which parties engage in exchange, buying and selling goods and services.

Price

The monetary total projected, essential, or disbursed as payment for an item.

Equilibrium Price

The price in the market where the amount of goods available matches the amount of goods people want to buy.

Supply

The aggregate quantity of a product or service that can be bought at a specific price point within a particular market.