Government tries to manage the macroeconomy by attempting to
A) stabilize the macroeconomy by maximizing the impact of the shocks that cause business cycles.
B) decrease the unemployment rate to zero percent.
C) stabilize the macroeconomy by minimizing the impact of the shocks that cause business cycles.
D) eliminate inflation.

Question

Quizplus · Accepted Answer

Governments aim to stabilize the macroeconomy by minimizing the impact of shocks that cause business cycles, rather than maximizing their impact, decreasing unemployment to zero (which is practically unachievable and not necessarily desirable due to the natural rate of unemployment), or eliminating inflation entirely (which is not always feasible or desirable, as a low level of inflation is often considered healthy for the economy).

Government Tries to Manage the Macroeconomy by Attempting to