Arguments in Favor of Passive Economic Policy Include All of the Following

question 92

Multiple Choice

Arguments in favor of passive economic policy include all of the following except:

• A) monetary and fiscal policies work with long and variable lags, which can produce destabilizing results.
• B) economic forecasts have too large a margin of error to be useful in formulating stabilization policy.
• C) recessions do not reduce economic well-being, so using monetary and fiscal policy for stabilization is unnecessary.
• D) the Great Depression could have been avoided if the Federal Reserve had pursued a policy of steady money growth.

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Definitions:

Candle Flame

The visible portion of a candle that is ignited, producing light and heat from the combustion process.

Sensation

The process by which sensory receptors and the nervous system receive and represent stimulus energies from our environment.

Perception

The process of recognizing, organizing, and interpreting sensory information in order to represent and understand the environment.

Sense Organs

Specialized structures in the body that provide organisms the ability to process and respond to external stimuli.