Nonactivists hold that
A) activist monetary policies are likely to be destabilizing rather than stabilizing.
B) economic fine-tuning is quite feasible.
C) flexibility in wages and prices is sufficient to allow the economy to return at a reasonable speed to full-employment output.
D) a and c
E) all of the above

Question

Quizplus · Accepted Answer

Nonactivists believe that activist monetary policies (trying to adjust the money supply and interest rates) can be destabilizing rather than stabilizing for the economy. However, they do believe in the flexibility of wages and prices to allow the economy to move towards full-employment output without government intervention. Therefore, options A and C are both true for nonactivists. Option B, stating that economic fine-tuning is quite feasible, is not supported by nonactivists.

Nonactivists Hold That