Given current limitations,fiscal policy as a macroeconomic stabilizer is more defensible the ________ the output gap being suffered,an argument supporting ________.
A)larger; fine tuning
B)larger; gross tuning
C)smaller; fine tuning
D)smaller; crowding out
E)larger; crowding out

Question

Quizplus · Accepted Answer

Fiscal policy as a macroeconomic stabilizer is more defensible the larger the output gap, because significant deviations from potential output justify more substantial interventions. This aligns with the concept of "gross tuning," which involves making larger adjustments to address more significant economic issues, rather than "fine tuning," which refers to making small adjustments to address minor deviations.

Given Current Limitations,fiscal Policy as a Macroeconomic Stabilizer Is More