Which of the Following Statements Is True

question 25

Multiple Choice

Which of the following statements is true?

• A)Keynesians believe that consumers are inherently unstable in consumption decisions,but that businesses are relatively stable in making investment decisions.
• B)Monetarists believe in discretionary monetary policy.
• C)Lowering tax rates is the main priority of Supply Side economists.
• D)Rational expectationists argue that businesses have a poor record of anticipating government fiscal policy.
• E)All of the statements are true

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Definitions:

Extraordinarily High Inflation

A situation where the rate of inflation becomes extremely high and uncontrollable, eroding purchasing power and destabilizing the economy.

Budget Deficit

The financial situation where government’s expenditures exceed its revenues within a specific time period, leading to borrowing or debt accumulation.

Central Bank

An institution that manages a country's currency, money supply, and interest rates, and oversees the commercial banking system.

Open Market Purchases

Transactions by a central bank in which it buys securities from the market to increase the money supply and encourage economic activity.