Policymakers'use of stabilization policy to eliminate output gaps is more appropriate when an economy self corrects very ______ and when the output gap is very ____.
A)rapidly; large
B)rapidly; small
C)slowly; small
D)slowly; large

Question

Quizplus · Accepted Answer

Stabilization policy is more appropriate when the economy self-corrects slowly and the output gap is large, as immediate intervention is needed to address significant economic imbalances.

Policymakers'use of Stabilization Policy to Eliminate Output Gaps Is More