Passive economic policy seeks to:
A) offset fluctuations in real GDP.
B) use monetary and fiscal policy to shift aggregate demand.
C) respond to changing economic conditions.
D) take a hands-off approach to macroeconomic policy.

Question

Quizplus · Accepted Answer

Passive economic policy takes a hands-off approach to macroeconomic policy, with the belief that the economy will self-correct and that government intervention could potentially make things worse. Therefore, it does not actively seek to offset fluctuations in real GDP or use monetary and fiscal policy to shift aggregate demand, although it may respond to changing economic conditions if necessary.

Passive Economic Policy Seeks To