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

question 29

Multiple Choice

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

• A) failing to use monetary and fiscal policy leads to inefficient fluctuations in output and employment.
• B) the Great Depression could have been avoided if the Federal Reserve had pursued a policy of steady money growth.
• C) fluctuations in real GDP have been less severe following World War II than prior to World War I.
• D) failure of policymakers to respond to large contractionary shocks to private spending caused the Great Depression.

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Definitions:

Moving Averages

A technique used in technical analysis that smooths out price data by creating a constantly updated average price over a specific period of time.

Market Price

The market price is the current price at which an asset or service can be bought or sold in a marketplace, subject to the forces of supply and demand.

Mental Accounting

Individuals mentally segregate assets into independent accounts rather than viewing them as part of a unified portfolio.

High Cash Dividends

Refers to companies that payout a large portion of their earnings to shareholders in the form of dividends, usually signifying stable income.