If It Is Clear That a Disturbance Is Only Transitory

Multiple Choice

If it is clear that a disturbance is only transitory, the best policy response often is to

A) react moderately or not at all because any policy action may itself be destabilizing
B) use only monetary policy since its effects are less powerful than fiscal policy
C) act quickly and vigorously since another disturbance may follow soon
D) use only fiscal policy since its impact is more direct and immediate
E) use an expansionary fiscal/restrictive monetary policy mix to avoid inflationary pressure