Solved

Which of the Following Is True About Keynesians and Monetarists

Question 56

Multiple Choice

Which of the following is true about Keynesians and monetarists with regards to policy intervention?


A) Keynesians favor the use of fiscal policy to bring the economy back to its potential output while monetarists favor the use of monetary policy to bring the economy back to its potential output.
B) Keynesians favor active policy intervention to bring the economy back to its potential output while monetarists argue that the uncertain nature of lags renders policy intervention
Destabilizing.
C) Keynesians argue that with its shorter and more predictable policy lags, fiscal policy is more effective that monetary policy in bringing the economy back to its potential output, while
Monetarists argue that monetary policy lags are much shorter and more predictable than fiscal policy lags and therefore more effective in bringing the economy back to its potential
Output.
D) While both schools favor the use of intervention policies, Keynesians argue that such policies are more effective at eliminating recessionary gaps while Monetarists contend that they are
More effective at eliminating inflationary gaps.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents