Government stabilization policy would be unnecessary if the economy automatically gravitated toward

Question

Quizplus · Accepted Answer

Government stabilization policy, such as monetary and fiscal policies, is implemented to mitigate economic fluctuations and bring the economy back to equilibrium, particularly during recessions or periods of high inflation. However, if the economy automatically gravitated towards full employment, there would be no need for government intervention or policy implementation, as the economy would be operating at its most efficient level. Therefore, choice B, full employment, is the best answer.

Government Stabilization Policy Would Be Unnecessary If the Economy Automatically