Economists who believe in activist policy making argue that

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Economists who believe in activist policy making argue that decreases in aggregate demand definitely impact the economy in the short run, and therefore, government intervention is necessary to stabilize the economy through fiscal and monetary policies such as stimulus packages, tax cuts, and interest rate adjustments. Option A is incorrect because decreases in aggregate demand have both short-run and long-run effects on the economy. Option C is incorrect because unplanned changes in the money supply, such as the injection of liquidity during a financial crisis, can have a significant impact on the economy. Option D is incorrect because increases in the minimum wage levels may improve the well-being of low-income workers, but they have mixed effects on job creation and economic growth.

Economists Who Believe in Activist Policy Making Argue That