Macroeconomic policies should:

Question

Quizplus · Accepted Answer

Macroeconomic policies should aim to reduce the severity of the ups and downs of the business cycle, also known as stabilization policies. This involves using fiscal and monetary policies to smooth out fluctuations in economic activity and maintain steady growth over time. Encouraging very fast growth (B) is not always sustainable and can lead to inflation and other economic imbalances. The highest possible unsustainable long-term economic growth (C) is not a desirable goal, as it ignores the importance of sustainable development and managing economic externalities. Encouraging the economy not to grow in the long run (D) would be counterproductive and would lead to stagnation and decline.

Macroeconomic Policies Should