Mainstream Economists Think That

Multiple Choice

Mainstream economists think that

A) market participants change their actions in response to anticipated price-level changes such that no change in real output occurs.
B) the economy self-corrects when unanticipated events divert it from its full-employment level of real output.
C) the downward inflexibility of wages and prices may leave the economy stuck in a costly recession for long periods.
D) significant changes in technology and resource availability cause macroeconomic instability.