When making a case against active stabilization policies, what do some economists argue?
A)Monetary policy should not be used to stabilize the economy.
B)Policy instruments cannot be used to achieve long term goals.
C)Fiscal policies are theoretically invalid as instruments for stabilizing the economy.
D)Policies are effective immediately, with too short lags.

Question

Quizplus · Accepted Answer

Monetary policy is one of the main tools used by central banks to stabilize the economy. Some economists argue that monetary policy should not be used for this purpose because it can lead to unintended consequences, such as inflation or deflation.

When Making a Case Against Active Stabilization Policies, What Do