Why Does a Passive Approach to Economic Policy Call for the Government

question 22

Multiple Choice

Why does a passive approach to economic policy call for the government to do nothing to offset unemployment?  

• A) because there is a lack of any real concern for people who have no jobs 
• B) because there is a conviction that unemployment is relatively harmless 
• C) because there is a belief that active economic policy is likely to be either ineffective or harmful 
• D) because there is a desire to await further economic data before intervening

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Definitions:

Marginal Benefit

The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product or service, which varies depending on the level of production.

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The sum of all costs associated with the production of a good or service, including both fixed and variable costs.