Which economic perspective would be most closely associated with the view that discretionary monetary policy is an effective force for stabilizing the economy?
A) monetarism
B) mainstream economics
C) rational expectations
D) new classical economics

Question

Quizplus · Accepted Answer

Mainstream economics, which encompasses a variety of perspectives including Keynesian economics, generally supports the use of discretionary monetary policy as a tool for stabilizing the economy. This contrasts with monetarism, rational expectations, and new classical economics, which tend to emphasize the limitations or ineffectiveness of discretionary monetary policy.

Which Economic Perspective Would Be Most Closely Associated with the View