Match each statement with the School of Thought that best fits. The focus of macroeconomic policy [ [ Choose ] should be to increase incentives for households and businesses to work, save, and invest. The economy is inherently unstable [ and policymakers should use stimulus [ Choose ] to avoid serious economic downturns. Policymakers should follow rules [ [ Choose ] designed to promote long-term economic stability. Economic booms are created when [ banks expand credit and interest rates [ Choose ] are artificially lowered, causing overinvestment. Fiscal policy is an ineffective tool in [ the long run because budget deficits [ Choose ] lead to reduced exports and increased imports. > > >

Match each statement with the School of Thought that best fits. The focus of macroeconomic policy [ [ Choose ] should be to increase incentives for households and businesses to work, save, and invest. The economy is inherently unstable [ and policymakers should use stimulus [ Choose ] to avoid serious economic downturns. Policymakers should follow rules [ [ Choose ] designed to promote long-term economic stability. Economic booms are created when [ banks expand credit and interest rates [ Choose ] are artificially lowered, causing overinvestment. Fiscal policy is an ineffective tool in [ the long run because budget deficits [ Choose ] lead to reduced exports and increased imports. > > >

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical

Section: Chapter Questions

Problem 8E

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