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Suppose the Time Required for an Economy to Self-Correct Is

Question 114

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Suppose the time required for an economy to self-correct is shorter than the active policy lags.Which of the following best describes the results of implementing an active policy?  


A)  Active policy should be strengthened. 
B)  Active policy will likely be destabilizing. 
C)  The aggregate demand curve will shift more rapidly than the short-run aggregate supply curve. 
D)  Active policy will work better than passive policy.

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