Multiple Choice
Economic analysis suggests that countercyclical macro-policy will
A) be difficult to time properly because of uncertainty about the future direction of the economy.
B) be difficult to implement because we do not know whether monetary policy is transmitted through the interest rate, or whether it affects aggregate demand directly.
C) reduce the natural rate of unemployment when macro-policy is persistently expansionary.
D) help reduce economic instability if, and only if, we are willing to tolerate double-digit inflation.
Correct Answer:
Verified
Correct Answer:
Verified
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