Question

A majority of economists would agree with which of the following statements?

A. “Fiscal Policy has a significant stimulative impact on a less than fully employed economy.”

B. “Inflation is never caused by changes in the money supply.”

C. “Management of the business cycle should be left to Congress; activist monetary policy should be avoided.”

D. None of the above answers are correct (since a majority of economists would not agree with any of these statements).

Answer 1

ANS

Option D . None of the above answers are correct (since a majority of economists would not agree with any of these statements). As the first statement "Fiscal Policy has a significant stimulative impact on a less than fully employed economy" as in a survey which was conducted American Economic Association they founded that majority of economists did not agree with this statement. Second statement which is “Inflation is never caused by changes in the money supply", is not true because inflation is caused by increase in money supply and the third statement is not right because as it says that “Management of the business cycle should be left to Congress; activist monetary policy should be avoided" but the management of business cycle should be left to Federal Reserve and not Congress. So in conclusion none of the threee answers are correct.