One of the justifications of government stabilization policy is that it may
a. increase the fluctuations in inflation and employment.
b. increase the multiplier effect of changes in autonomous spending.
c. increase the volatility of economic variables.
d. reduce the severity of inflation and unemployment.
d
Economics
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In the long run, new firms can enter an industry and so the supply elasticity tends to be:
A. more elastic than in the short run. B. less elastic than in the short run. C. perfectly inelastic. D. perfectly elastic.
Economics
When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
Economics