Monetary policy that seeks to minimize the business cycle in the AS/AD model involves:

Question

Quizplus · Accepted Answer

Monetary policy aiming to minimize the business cycle in the AS/AD model involves using contractionary policy when the economy is overheating (above trend growth) to prevent inflation, and expansionary policy when the economy is underperforming (below trend growth) to stimulate economic activity. This approach helps stabilize the economy over time.

Monetary Policy That Seeks to Minimize the Business Cycle in the AS/AD