An effective policy of governmental intervention in the economy ...

[s.tung]

An effective policy of governmental intervention in the economy requires all of the following except one. Which is the exception?
 a. The will to reject sound policy if it gets in the way of political considerations
 b. The ability to estimate the economy's potential level of output
 c. The ability to predict what would happen without intervention
 d. An assortment of effective tools of discretionary policy
 e. The ability to achieve effective cooperation between fiscal and monetary policy makers

Question 2

Discretionary policy advocates believe:
 a. that there is a high cost associated with the use of a discretionary policy.
 b. that self-corrective forces in an economy work slowly.
 c. that natural adjustments of wages and prices can help attain potential output.
 d. in rational expectations.
 e. that an active stabilization policy imposes troubling fluctuations in the price level and real GDP.

[blfontai]

Answer to Question 1

a

Answer to Question 2

b

[s.tung]

Excellent

[mjenn52]

TYSM