Different business cycle models
A)support monetary policy but not fiscal policy.
B)have contradictory implications for monetary and fiscal policy.
C)have similar implications for monetary and fiscal policy.
D)all imply that active government intervention is detrimental.
E)all justify active government stabilization policy.

Question

Quizplus · Accepted Answer

Different business cycle models often have contradictory implications for monetary and fiscal policy. Some models suggest that monetary policy is more effective in stabilizing the economy, while others argue that fiscal policy is more effective. This can create challenges for policymakers who must choose which policy tool to use in addressing economic fluctuations.

Different Business Cycle Models