Which of the following statements about stabilization policy is not true?
AMany economists prefer automatic stabilizers because they affect the economy with a shorter lag than activist stabilization policy
BLong lags enhance the ability of policy makers to fine tune the economy
CNone of these answers are true
DWhen policy makers implement activist stabilization policies there is a significant risk that their policies may actually have a destabilizing effect
Correct answer
B. Long lags enhance the ability of policy makers to fine tune the economy
Explanation
The correct answer is Long lags enhance the ability of policy makers to fine tune the economy.