An emphasis on inflation stability is compatible with a nonactivist stance only when shocks to the macroeconomy are ________.
A)permanent supply shocks
B)temporary supply shocks
C)aggregate demand shocks
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Temporary supply shocks are less likely to have long-lasting effects on the economy, making it possible to maintain a focus on inflation stability without the need for frequent policy adjustments, which aligns with a nonactivist stance.

An Emphasis on Inflation Stability Is Compatible with a Nonactivist