Stabilization policy refers to policy actions aimed at:
A) reducing the severity of short-run economic fluctuations.
B) equalizing incomes of households in the economy.
C) maintaining constant shares of output going to labor and capital.
D) preventing increases in the poverty rate.

Question

Quizplus · Accepted Answer

Stabilization policy is focused on reducing the severity of short-run economic fluctuations, such as recessions and booms, through actions like adjusting government spending, taxation, and monetary policy. The other choices are not specific objectives of stabilization policy.

Stabilization Policy Refers to Policy Actions Aimed At