A social welfare function that is to be germane to the evaluation of macroeconomic policy should be constructed to depend on
A) instrumental variables.
B) final target variables.
C) intermediate target variables.
D) some combination of final and intermediate target variables.
E) all of the above.

Question

Quizplus · Accepted Answer

A social welfare function should depend on final target variables because these are the ultimate outcomes that reflect the well-being of society, such as employment levels, inflation rates, and economic growth.

A Social Welfare Function That Is to Be Germane to the Evaluation