The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, thereis some debate regarding whether the government should attempt to stabilize the economy.Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply.Businesses make investment plans many months in advance.Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates.Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president.Which of the following policies are examples of automatic stabilizers? Check all that apply.Unemployment insurance benefitsThe federal funds rateThe discount rate

Answered: The government possesses the tools…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there
is some debate regarding whether the government should attempt to stabilize the economy.
Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply.
Businesses make investment plans many months in advance.
Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.
The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates.
Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president.
Which of the following policies are examples of automatic stabilizers? Check all that apply.
Unemployment insurance benefits
The federal funds rate
The discount rate

Expert Solution

Step 1: Describe macroeconomic analysis

Since macroeconomic analysis influences the economy's resilience and long-term growth, it will continue to be important. Promoting economic growth, resolving social disputes, encouraging community achievement, and tackling problems like economic inequality, the effects of climate change, and technological flaws are among the goals of macroeconomic policy.

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions