Would you say this is a valid argument against stabilization

Reference no: EM133438927

Question: In this chapter, we have been told that the economy, if left alone, will self-correct (classical economics) from a shock even without an explicit government intervention (Keynesian economics). So if someone were to say, "Using monetary or fiscal policy to pump up the economy is counterproductive -you get a brief high, but then you have the pain of inflation," would you say this is a valid argument against stabilization policy? Why or why not? Explain your answer by applying the workings of the AS/AD model from this chapter.

Reference no: EM133438927

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