Those Who Favor an Active Approach to Policy Believe That

Multiple Choice

Those who favor an active approach to policy believe that _____

A) discretionary monetary policy cannot be used to help an economy since monetary policy lags are long.
B) discretionary fiscal policy cannot be used to help an economy since fiscal policy lags are long.
C) the lags associated with implementing policies are too long and unstable for discretionary policy to be effective.
D) despite the lags involved, implementing discretionary policy is preferable to inaction.
E) discretionary fiscal policy cannot be used to help an economy since it leads to inflation.