Which of the Following Is an Argument Against Trying to Use

question 20

Multiple Choice

Which of the following is an argument against trying to use policy to stabilize the economy?

• A)Recessions represent a waste of resources.
• B)Pessimism on the part of households and firms may become a self-fulfilling prophecy.
• C)"Leaning against the wind" requires policymakers to increase aggregate demand in recessions and reduce aggregate demand in booms.
• D)Macroeconomic forecasting is not developed sufficiently to allow policymakers to change aggregate demand at the proper time.

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Definitions:

Resold

The act of selling an item or asset that has already been purchased.

Net Income

The profit a company generates after all expenses, taxes, and costs have been deducted from total revenue.

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends, but last in priority for assets and income.

Cash Dividends

Distributions of a corporation's earnings to shareholders as a return on their investment, typically in the form of cash.