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2 June, 01:22

Which of the following statements is correct when considering the choice between active and passive policy making? A. Economists believing that markets are stable and efficient support monetary policy; economists that believe that there are rigidities in markets support fiscal policy.

B. Economists believing that markets are stable and efficient support passive policy making; economists that believe that there are rigidities in markets support active policy making.

C. Economists believing that markets are stable and efficient support active policy making; economists that believe that there are rigidities in markets support passive policy making.

D. Economists believing that markets are stable and efficient support contractionary policy making; economists that believe that there are rigidities in markets support expansionary policy making.

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  1. 2 June, 01:35
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    B. Economists believing that markets are stable and efficient support passive policy making; economists that believe that there are rigidities in markets support active policy making.

    Explanation:

    According to the active policy making, the economy should be under the control of the federal government. It is the type of policy making that is in response to the potential changes in the activities involving economics.

    Whereas, passive policy making is not in response to the changes in the economic activities. According to the economist, the economy will be stable on its own when the government does involve in it.

    Hence the answer is - --

    B. Economists believing that markets are stable and efficient support passive policy making; economists that believe that there are rigidities in markets support active policy making.
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