Opponents of policy activism argue that even if intended private spending is NOT stable,economic stability nonetheless occurs because of
A) large government budget deficit spending.
B) the willingness of banks to hold excess reserves.
C) offsetting fluctuations in the velocity of circulation.
D) flexible wages and prices.
E) the acceleration effect.

Question

Quizplus · Accepted Answer

Opponents of policy activism argue that even if private spending is not stable, economic stability can occur due to flexible wages and prices. This means that if there is a decrease in demand for a product, its price will decrease, and if there is an increase in demand, the price will increase. This flexibility helps to stabilize the overall economy without the need for government intervention.

Opponents of Policy Activism Argue That Even If Intended Private