Which statement does NOT represent the broad consensus among macroeconomists?
A) Monetary policy should play the main role in stabilization policy.
B) The central bank should be independent, insulated from political pressures, to avoid a political business cycle.
C) Discretionary fiscal policy should be used sparingly because of policy lags and the risks of the political business cycle.
D) Discretionary fiscal policy can lower the natural rate of unemployment.

Question

Quizplus · Accepted Answer

A broad consensus among macroeconomists is that discretionary fiscal policy should be used sparingly because of policy lags and the risks of the political business cycle. However, there is no consensus that discretionary fiscal policy can lower the natural rate of unemployment. In fact, some economists argue that fiscal policy can actually have little impact on the long-term natural rate of unemployment.

Which Statement Does NOT Represent the Broad Consensus Among Macroeconomists