Which of the following statements about the debate over stabilization policy are correct? Check all that apply. A)Opponents of active stabilization policy believe that significant time lags in both fiscal and monetary policy often exacerbate economic fluctuations. B)Opponents of active stabilization believe that active fiscal and monetary policies have no effect on aggregate demand. C)Advocates of active stabilization believe that automatic stabilizers have no effect on aggregate demand. D)Advocates of active stabilization believe that implementation lags for fiscal and monetary policy do not exist.
The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy.
1. Which of the following statements about the debate over stabilization policy are correct? Check all that apply.
A)Opponents of active stabilization policy believe that significant time lags in both fiscal and monetary policy often exacerbate economic fluctuations.
B)Opponents of active stabilization believe that active fiscal and
C)Advocates of active stabilization believe that automatic stabilizers have no effect on aggregate demand.
D)Advocates of active stabilization believe that implementation lags for fiscal and monetary policy do not exist.
2. Which of the following are examples of automatic stabilizers? Check all that apply.
A)The federal funds rate
B)Corporate income taxes
C) Personal income taxes
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