One of the main sources of disagreement amongst economists about macroeconomic policy is:
A) a fundamental disagreement about the role of taxation.
B) how far and how quickly macroeconomic variables adjust in response to changing economic conditions.
C) whether the marginal propensity to consume can be calculated accurately.
D) the fact that the IS-LM model has no relevance at all to a modern developed economy.

Question

Quizplus · Accepted Answer

Economists often disagree about the speed and magnitude of adjustments of macroeconomic variables such as GDP, inflation, and unemployment in response to changes in economic conditions. Some economists believe that these adjustments happen quickly and smoothly, while others believe that they can be slow and unpredictable. This disagreement can lead to different recommendations for how policymakers should respond to economic problems such as recessions or inflation.

One of the Main Sources of Disagreement Amongst Economists About