Multiple Choice
Consider policymakers who favour a passive approach to policy.Which of the following do these policymakers believe?
A) Discretionary monetary policy can be used to help the economy because monetary policy lags are short.
B) Discretionary fiscal policy can be used to help the economy because fiscal policy lags are short.
C) 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.
Correct Answer:
Verified
Correct Answer:
Verified
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