31) What event led to the formulation of the “Lucas Critique” that denied the efficacy of active stabilization

Question

31) What event led to the formulation of the “Lucas Critique” that denied the efficacy of active stabilization policy?
A) The U.S. stagflation of the 1970s
B) The collapse of the Soviet Union
C) The Great Depression
D) The "Goldilocks economy" of the 1990s
E) The recession of 1991
32) In the United States, active stabilization policy has been used by the federal government since
A) the founding of the nation.
B) the Civil War.
C) World War I.
D) the Great Depression.
E) Johnson's War on Poverty.

Answer 1

1. a The Lucas critique was published in the 1980's and the events since then have somewhat discredited it.
2. d It came about as a result of government's attempts to get out of the depression.

Answer 2

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