Why Should Policymakers NOT Try to Stabilize the Economy

Why should policymakers NOT try to stabilize the economy?

A) because recessions represent a waste of resources
B) because pessimism on the part of households and firms may become a self-fulfilling prophecy
C) because "leaning against the wind" requires policymakers to increase aggregate demand in recessions and reduce aggregate demand in booms
D) because macroeconomic theory is not developed sufficiently to show policymakers how to change aggregate demand

Correct Answer:

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