Stabilization policy:
A) aims at keeping output and employment at their natural rates.
B) always succeeds in keeping output and employment at their natural rates.
C) is generally ineffective.
D) does more harm than good.

Question

Quizplus · Accepted Answer

Stabilization policy aims at keeping output and employment at their natural rates through various measures such as fiscal and monetary policy. While it may not always succeed in achieving this goal, its aim is to stabilize the economy during periods of fluctuation or crisis. Therefore, option A is the best choice.

Stabilization Policy