Suppose the natural unemployment rate CANNOT easily be calculated.What type of policy is more difficult to implement under these circumstances?
A) recognition policy
B) neutral policy
C) passive policy
D) active policy

Question

Suppose the natural unemployment rate CANNOT easily be calculated.What type of policy is more difficult to implement under these circumstances?  
A) recognition policy 
B) neutral policy 
C) passive policy 
D) active policy

Quizplus · Accepted Answer

Active policy is more difficult to implement when the natural unemployment rate cannot easily be calculated because it requires policymakers to make assumptions about the current state of the economy that may be incorrect. Passive policies, like automatic stabilizers, do not require policymakers to make these assumptions and can still be effective in stabilizing the economy. Recognition policy and neutral policy are not relevant in this situation.

Suppose the Natural Unemployment Rate CANNOT Easily Be Calculated