Given the uncertainty about the effects of macro policy, economists generally propose that:
A) macro policies should be more active, the lower the level of unemployment or inflation.
B) money growth should be set at zero by constitutional amendment.
C) changes in money growth should only be used for fine tuning the economy, not for correcting large imbalances (such as high inflation).
D) policymakers should stop well short of fine tuning.
E) elected officials should have more input in the determination of monetary policy.

Question

Quizplus · Accepted Answer

Economists generally propose that policymakers should stop well short of fine tuning, as there is uncertainty about the effects of macro policy. Fine-tuning may end up causing unintended consequences and potentially worsen an already unfavorable situation. Therefore, a more cautious and restrained approach to macro policy is recommended.

Given the Uncertainty About the Effects of Macro Policy, Economists