If it is unknown whether a disturbance is temporary or permanent,
A)an attempt should be made to keep both unemployment and inflation constant by fine-tuning the economy
B)strong measures should be employed immediately to leave no doubt about the government's commitment to full employment
C)large changes in taxes, government purchases, or money supply should be undertaken to get quick policy responses
D)only modest policy changes should be made to avoid creating unnecessary fluctuations in the economy
E)short-term interest rates should be changed quickly through monetary policy actions

Question

If it is unknown whether a disturbance is temporary or permanent,
A)an attempt should be made to keep both unemployment and inflation constant by fine-tuning the economy
B)strong measures should be employed immediately to leave no doubt about the government's commitment to full employment
C)large changes in taxes, government purchases, or money supply should be undertaken to get quick policy responses
D)only modest policy changes should be made to avoid creating unnecessary fluctuations in the economy
E)short-term 	interest rates should be changed quickly through monetary policy actions

Quizplus · Accepted Answer

The Answer is D

If It Is Unknown Whether a Disturbance Is Temporary or Permanent