Which of the Following Statements Is False

question 157

Multiple Choice

Which of the following statements is false?

• A) Activists are more likely to advocate fine-tuning the economy than nonactivists.
• B) Activists believe that monetary and fiscal policies can be and should be deliberately used to smooth out the business cycle.
• C) Nonactivists believe that monetary and fiscal policies cannot and should not be deliberately used to (try to)smooth out the business cycle.
• D) Nonactivists favor rules-based monetary policy.
• E) none of the above

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Definitions:

Economic Profits

The surplus generated when total revenues exceed the total costs (including both explicit and implicit costs) of production, reflecting a return beyond the normal profit level.

Total Costs

The combined total of expenses related to the generation of goods or services, integrating both unchanging and adjustable costs.

Market Economy

An economic system in which supply and demand from consumers direct the production of goods and services.

Market System

An economic system based on supply and demand where prices are determined in a free price system.