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- Subject
- Macroeconomic Policy Toolseconomics-mcqs › macroeconomic-policy-tools
- Published
- 31 May 2019
- Last updated
- 28 May 2026
Which of the following statements about stabilization policy is incorrect?
Multiple choice question for Macroeconomic Policy Tools. Select an option, then review the explanation below.
Explanation
Option A is true because automatic stabilizers work more quickly than activist policies. Option B is false since not all statements are incorrect. Option C is incorrect because long delays actually reduce policymakers' ability to fine-tune the economy. Option D is true as activist policies can sometimes destabilize the economy if mistimed.
More Macroeconomic Policy Tools MCQs
Practice related questions from the same subject.
- 1.Which of the following functions as an automatic economic stabilizer?
- 2.If the government raises its spending by Rs16 billion and the multiplier effect outweighs the crowding out effect, what will be the impact on the economy?
- 3.Which economic phenomenon is illustrated when higher government spending boosts income, shifts the demand for money to the right, increases interest rates, and consequently reduces investment?
- 4.What is the effect of an increase in the marginal propensity to consume (MPC) on the multiplier?
- 5.What is the immediate effect of a rise in government expenditure on the economy?