Answer to Question #150863 in Macroeconomics for Karanbeer

Question

What is the difference between fine tuning and gross tuning

Answer 1

Fine tuning refers to the process of adjustments that brings equilibrium in the economy whereas gross tuning refers to refers to the use of macroeconomic policy to stabilize the economy in that large deviations from potential output do not persist for extended periods of time.

Gross tuning is perfect than fine tuning since it is cost-effective to fine tuning.