Stabilization policy is policy that seeks to

Question

Quizplus · Accepted Answer

Stabilization policy aims to smooth out fluctuations in the economy, such as those caused by business cycles. It seeks to stabilize the economy around its long-run potential, rather than eliminate fluctuations altogether. Zero inflation or eradicating unemployment are specific goals that may be part of stabilization policy, but they are not the primary objective. Maximizing output is another specific goal that may be part of stabilization policy, but again it is not the primary objective.

Stabilization Policy Is Policy That Seeks to