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In a Study by Christina Romer on Macroeconomic Stabilization Policy

Question 110

Multiple Choice

In a study by Christina Romer on macroeconomic stabilization policy in the United States after World War II, Christina Romer argues that there has been a rise in policy-induced recessions because


A) policymakers have insufficient information about how economic agents respond to changes in key macroeconomic variables.
B) both monetary and fiscal authorities were more concerned with keeping inflation moderate than in reducing unemployment.
C) The Fed has generally been too expansionary when the economy was growing which has led to inflation which the Fed then sought to reduce using contractionary policy.
D) policymakers tend to pursue policies that are politically popular rather than those that are economically sound.

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