Discretionary economic policy is not beneficial in the ________.
A)traditional Keynesian theory
B)new Keynesian theory
C)Luka Brazzi model
D)real business cycle theory

Question

Quizplus · Accepted Answer

Real business cycle theory asserts that economies are self-correcting and will eventually return to full employment in the long run without government intervention. Therefore, discretionary economic policy is not beneficial in this theory. On the other hand, traditional Keynesian theory, new Keynesian theory, and the Luka Brazzi model all support the use of discretionary economic policy to manage macroeconomic conditions.

Discretionary Economic Policy Is Not Beneficial in the ________