Arguments in favor of passive economic policy include all of the following except:
A) monetary and fiscal policies work with long and variable lags, which can produce destabilizing results.
B) economic forecasts have too large a margin of error to be useful in formulating stabilization policy.
C) recessions do not reduce economic well-being, so using monetary and fiscal policy for stabilization is unnecessary.
D) the Great Depression could have been avoided if the Federal Reserve had pursued a policy of steady money growth.

Question

Quizplus · Accepted Answer

All of the other choices provide arguments in favor of passive economic policy, while C argues that economic stabilization is unnecessary.

Arguments in Favor of Passive Economic Policy Include All of the Following