Mainstream economists contend that, as stabilization tools,
A) discretionary ﬁscal policy is effective, but discretionary monetary policy is not.
B) discretionary monetary policy is effective, but discretionary ﬁscal policy is not.
C) both discretionary ﬁscal policy and discretionary monetary policy can be effective if appropriately used.
D) discretionary ﬁscal policy and discretionary monetary policy cause more instability than they cure.

Question

Quizplus · Accepted Answer

Mainstream economists believe that both discretionary fiscal policy and discretionary monetary policy can be effective if used appropriately. This means that both tools can be used to stabilize an economy in times of recession or inflation. However, the effectiveness of these policies depends on various factors, such as the timing, magnitude, and duration of the policy actions. Therefore, it is important to use these policies wisely and carefully to achieve the desired outcomes.

Mainstream Economists Contend That, as Stabilization Tools