The response of monetary policy to a change in fiscal policy is an example of a more general phenomenon: the use of _______________ to steady aggregate demand and, as a result, production and employment.
A) macroeconomic policies.
B) active stabilization policies.
C) financial policies.
D) research-led policies.

Question

Quizplus · Accepted Answer

The use of monetary policy to stabilize aggregate demand after a change in fiscal policy is an example of active stabilization policies. These are macroeconomic policies aimed at reducing the volatility of production, employment, and prices in the short run. Financial policies are a subset of macroeconomic policies that focus specifically on financial markets and institutions. Research-led policies are not a category of macroeconomic policies.

The Response of Monetary Policy to a Change in Fiscal