Automatic Destabilizing Policies Would Tend to

question 22

Multiple Choice

Automatic destabilizing policies would tend to

• A) negate inflation and stimulate expansion.
• B) promote the nation's exports.
• C) reinforce inflationary pressures and deepen recessionary conditions.
• D) decrease the nation's imports.

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Definitions:

Rational Expectations Theory

An economic idea suggesting that individuals make predictions about the future based on all available information and past experiences, thereby impacting markets and the economy.

Fiscal Policies

Fiscal policies are government strategies involving taxation and spending decisions designed to influence economic conditions, including growth, inflation, and unemployment.

Monetary Policies

Economic strategies and decisions by a government or central bank to control the money supply and interest rates in an economy.

Conservative Economists

Economists who prioritize free market principles, limited government intervention, and fiscal conservatism in their analysis and policy recommendations.