The primary argument against active monetary and fiscal policy is that
A)attempts to stabilize the economy do not constitute a proper role for government in a democratic society.
B)these policies affect the economy with a long lag.
C)these policies affect the economy too quickly and with too much impact.
D)history demonstrates that interest rates respond unpredictably to active policies,leading to unpredictable effects on income.

Question

Quizplus · Accepted Answer

The primary argument against active monetary and fiscal policy is that these policies affect the economy with a long lag, meaning that the impact of the policy may not be felt immediately and may not have the desired effect. This argument is based on the idea that the economy is complex and dynamic, and that attempting to manipulate it through government policies can have unintended consequences. Other arguments against active policy include concerns about inflation, government debt, and the potential for political interference in the economy. However, the argument about lag time is the most commonly cited reason why some economists and policymakers are skeptical of active policy.

The Primary Argument Against Active Monetary and Fiscal Policy Is