Those Who Favor Active Use of Monetary and Fiscal Policy

Multiple Choice

Those who favor active use of monetary and fiscal policy believe that

A) the M1 money supply should be increased at a steady rate annually.
B) taxes should be increased during a recession in order to balance the federal budget.
C) the economy's self-correcting mechanism, if not stifled by perverse policies, will prevent prolonged periods of high unemployment.
D) discretionary changes in macroeconomic policy can help smooth the business cycle of a market economy.