Which of the following statements is true? A) Nonactivists argue that monetary a

Question

Which of the following statements is true?

A) Nonactivists argue that monetary and fiscal policies should be deliberately used to smooth out the business cycle.

B) Fine-tuning consists of the usually frequent use of monetary policy to counteract even small undesirable movements in economy activity.

C) Keynesians would be more likely to advocate contractionary monetary policy to correct an inflationary gap than expansionary monetary policy to correct a recessionary gap.

D) B and C

E) A, B, and C

A) Nonactivists argue that monetary and fiscal policies should be deliberately used to smooth out the business cycle.

Explanation / Answer

B) Fine-tuning consists of the usually frequent use of monetary policy to counteract even small undesirable movements in economy activity.

Explanation: Activists argue that monetary and fiscal policies should be deliberately used to smooth out the business cycle.They are in favor of economic fine-tuning, which is the frequent use of monetary and fiscal policies to counteract even small undesirable movements in economic activity.

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