The case for a "hands off" economic policy is based on the widely held belief that
A)Fiscal policy works but monetary policy does not.
B)Monetary policy works but fiscal policy does not.
C)Discretionary policy can improve the economy in theory but is often impractical in practice.
D)Economic theory is inadequate to formulate effective discretionary policy.

Question

Quizplus · Accepted Answer

The case for a "hands off" economic policy is based on the belief that discretionary policy, both monetary and fiscal, can improve the economy in theory but is often impractical in practice due to issues such as timing lags, political biases, and uncertainty about the future. Therefore, advocates of a "hands off" approach argue that allowing market forces to operate without government intervention would lead to the most efficient allocation of resources and optimal economic outcomes.

The Case for a "Hands Off" Economic Policy Is Based