The Primary Argument Against Active Monetary and Fiscal Policy Is

question 45

Multiple Choice

The primary argument against active monetary and fiscal policy is that

• A)attempts to stabilize the economy do not constitute a proper role for government in a democratic society.
• B)these policies affect the economy with a long lag.
• C)these policies affect the economy too quickly and with too much impact.
• D)history demonstrates that interest rates respond unpredictably to active policies,leading to unpredictable effects on income.

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Definitions:

Common Stock

An equity security that represents ownership in a corporation, entitling holders to vote at shareholder meetings and receive dividends.

Net Cash

The amount of cash available after accounting for cash inflows and outflows over a particular period.

Operating Activities

Activities directly related to the primary business operations, including the production, distribution, and sale of goods or services.

Free Cash Flow

A measure that assesses a company’s ability to fund its capital expenditures and dividends from its net cash provided by operating activities.