Discretionary Policy Advocates Believe

Multiple Choice

Discretionary policy advocates believe:

A) that there is a high cost associated with the use of a discretionary policy.
B) that self-corrective forces in an economy work slowly.
C) that natural adjustments of wages and prices can help attain potential output.
D) in rational expectations.
E) that an active stabilization policy imposes troubling fluctuations in the price level and real GDP.