Macroeconomic policy activism:
A) is the use of political activism made popular by liberal economists.
B) mandates a balanced government budget.
C) is the use of monetary and fiscal policy to smooth out the business cycle.
D) was the tool used by classical economists.

Question

Quizplus · Accepted Answer

Macroeconomic policy activism refers to the use of monetary and fiscal policy to stabilize the economy and reduce fluctuations in the business cycle. This approach is favored by Keynesian economists who believe that government intervention through policy activism can correct market failures and promote stable economic growth. The use of political activism or a balanced government budget are not synonymous with macroeconomic policy activism. Classical economists generally advocated for a laissez-faire approach to the economy and did not emphasize policy activism.

Macroeconomic Policy Activism