Passive macroeconomic policy would rely on natural market forces and automatic stabilizers to close an expansionary gap.

Question

Quizplus · Accepted Answer

Passive macroeconomic policy is a hands-off approach that allows market forces and automatic stabilizers (like unemployment benefits and progressive taxation) to naturally correct for economic fluctuations. This means that the government does not actively intervene with fiscal or monetary policies, but rather allows the economy to adjust on its own.

Passive Macroeconomic Policy Would Rely on Natural Market Forces and Automatic