Which of the Following Statements Is Likely to Be Made

question 92

Multiple Choice

Which of the following statements is likely to be made by an economist who believes in activist monetary policy? (1) The more closely monetary policy can be designed to meet the particulars of a given economic environment,the better.(2) Because of long and uncertain time lags,activist monetary policy may be destabilizing rather than stabilizing.(3) There is sufficient flexibility in wages and prices in modern economies to allow the economy to equilibrate in reasonable speed at the natural level of Real GDP.(4) The "same-for-all-seasons" monetary policy is the way to proceed.(5) There is evidence that monetary policy in the mid-1970s caused a recession.

• A) (1),(2),and (3)
• B) (1),(4),and (5)
• C) (1)and (5)
• D) (4)and (5)
• E) (1),(3),and (4)

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Definitions:

Feelings of Inequity

Emotional responses that arise when an individual perceives an imbalance or unfairness in their work environment, especially in terms of rewards and contributions.

Overreward Inequity

A situation where an individual perceives they are getting more rewards than they believe they deserve compared to others.

Frustration-Regression

A psychological phenomenon observed in goal-oriented behavior, where an individual facing obstacles regresses to less mature behaviors or simpler strategies in order to deal with frustration.

Equity Theory

A theory in social psychology that explains how individuals perceive fairness in distribution of resources within interpersonal relationships, leading to satisfaction or dissatisfaction.