There is greater support for active policymaking when wage flexibility is common. price flexibility is common....

There is greater support for active policymaking when

		wage flexibility is common.
		price flexibility is common.
		pure competition is common.
		none of the above.

Expert Solution

Active policy making states that the government should actively participate in controlling and managing the economy.

It is believed that the private sector is unstable. If any shock occurs in this sector, then it will not automatically be able to heal from that. The government or the public sector will then have to come into the picture and help in the recovery process. In this sort of a situation, the government most often takes resort to discretionary fiscal policy measure.

You might be then tempted to ask, what exactly is the concept of discretionary policy, i iust mentioned about?

Well in simple terms, it is a type of policy which is not based on already prevalent rules. Based on a situation, the policy makers come up with such policies, which are most often quite different from the traditional policies.

Now, coming to the answer,

There is greater support for active policy making when : none of these.

In case of active policy making, none of these prove more crucial than the other. Hence option d would be the right option.

Rahul Sunny answered 1 year ago

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