The argument that ________ receives strong support from the innovative policy response to the recent financial crisis.
A) rules can be too rigid
B) discretionary policies are vulnerable to the time-inconsistency problem
C) money is the sole source of fluctuations in aggregate demand
D) changes in policies can change the coefficients in macroeconometric models
Question 2
A market failure associated with Keynesian economics is
A) pollution externalities.
B) economic agents cannot agree on prices and wages that are socially efficient.
C) insurance is imperfect.
D) banking panics.
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