Asked by Abigail Ferguson on May 19, 2024
Verified
Statement I: Monetarists argue that discretionary economic policies are destabilizing.
Statement II: Like Keynesians,monetarists believe that the economy is inherently unstable.
A) Statement I is true and statement II is false.
B) Statement I is false and statement II is true.
C) Both statements are true.
D) Both statements are false.
E) Not enough information is provided to determine if either statement is true or false
Discretionary Economic Policies
Economic policies based on judgment or choice rather than set rules, often involving government intervention in the economy through spending and taxation decisions.
Destabilizing
Causing or likely to cause a lack of stability in an economy or market, leading to uncertainty and potential financial downturns.
- Comprehend the various economic philosophies and their leading proponents.
- Assess the impact of economic doctrines on fiscal and monetary policy.
Verified Answer
MC
Michael CummingsMay 24, 2024
Final Answer :
A
Explanation :
Monetarists believe that discretionary economic policies are destabilizing because they create uncertainty and unpredictability in the economy. However, unlike Keynesians, they believe that the economy has a natural tendency towards stability if monetary policy is conducted appropriately. Therefore, statement I is true and statement II is false.
Learning Objectives
- Comprehend the various economic philosophies and their leading proponents.
- Assess the impact of economic doctrines on fiscal and monetary policy.
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