One argument in favor of activist monetary policy is that the economy does not always equilibrate quickly enough at Natural Real GDP.

Question

Quizplus · Accepted Answer

Activist monetary policy involves using monetary policy tools to influence the economy and move it towards Natural Real GDP. This is often done when the economy is not able to quickly equilibrate on its own due to factors such as sticky prices or wages. Therefore, the statement that the economy does not always equilibrate quickly enough at Natural Real GDP is true, supporting the argument for activist monetary policy.

One Argument in Favor of Activist Monetary Policy Is That