All of the Following Are Arguments Against Stabilization Policy Except

question 41

Multiple Choice

All of the following are arguments against stabilization policy except

• A)Economic forecasting is highly imprecise.
• B)Long lags may cause stabilization policies to in fact destabilize the economy.
• C)Monetary policy affects aggregate demand by changing interest rates.
• D)Fiscal policy must go through a long political process.

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Definitions:

Demand Schedule

A table or graph showing the quantity of a good or service that consumers are willing and able to purchase at various prices over a given period.

Marginal Utility

The extra pleasure a customer receives from using an additional unit of a product or service.

Consumer Surplus

The discrepancy between the amount consumers are prepared to pay for a product or service and the actual price they pay.

Utility

A measure of satisfaction, usefulness or value that a consumer receives from any good or service.