Which of the following views are consistent with the case for nondiscretionary macroeconomic policy?
A)Even with time lags,discretionary policy moves the economy to full employment before the economy's self-correcting mechanism would.
B)The wage and price adjustment process being extremely slow,a nondiscretionary policy results in a large loss of output.
C)Workers will come to expect expansionary policies whenever the economy moves below full employment.
D)A discretionary,accommodating policy of shifting the aggregate demand curve will produce less volatility in both the price level and output due to the short time it takes to shift aggregate demand.

Question

Quizplus · Accepted Answer

Nondiscretionary macroeconomic policy suggests that predictable policy rules can help manage expectations, such as workers expecting expansionary policies, which can reduce the effectiveness of discretionary policies.

Which of the Following Views Are Consistent with the Case