It Is Preferable to Use Monetary and Fiscal Policies Rather

question 26

Multiple Choice

It is preferable to use monetary and fiscal policies rather than direct controls to correct external balance problems because direct controls

• A) are ineffective.
• B) are not legal under WTO rules.
• C) interfere with the market mechanism.
• D) cannot be used with other economic policies.

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Definitions:

Internal Validity

The extent to which a study can demonstrate a causal relationship between variables, minimizing the impact of confounding variables.

External Validity

The extent to which the results of a study can be generalized to other situations and to other people outside of the experimental setting.

Construct Validity

The degree to which a test or instrument measures the theoretical construct or psychological concept it intends to measure.

Population

The total number of people under consideration.