Multiple Choice
The economy's self-correcting mechanism to eliminate a recessionary gap relies on
A) falling interest rates that shift the aggregate demand curve outward.
B) falling wage rates that shift the aggregate supply curve outward.
C) rising wage rates that shift the aggregate supply curve inward.
D) increases in the price level that shift the aggregate supply curve inward.
Correct Answer:

Verified
Correct Answer:
Verified
Q132: Reducing aggregate demand to fight inflation will
Q133: There is no long-run trade-off between inflation
Q134: The Phillips curve is an extension of
Q135: Demand-side inflation differs from supply-side inflation in
Q136: In the long run, the unemployment rate
Q138: Along a short-run Phillips curve, a higher
Q139: If workers demand wage compensation in advance
Q140: If policymakers do nothing in a recessionary
Q141: All points on the long-run Phillips curve
Q142: An increase in aggregate demand is most