Under what circumstances is it most clear that the government should pursue neither fiscal nor monetary policy?
A)There is no inflation and the unemployment rate equals the target rate of unemployment
B)Unemployment rate exceeds the target rate of unemployment
C)The economy is experiencing deflation
D)The economy is below potential output

Question

Quizplus · Accepted Answer

When there is no inflation and the unemployment rate equals the target rate of unemployment, it indicates that the economy is operating at its potential, suggesting no need for intervention through fiscal or monetary policy.

Under What Circumstances Is It Most Clear That the Government