Which of the Following Statements Supports the Passive Approach to a Contractionary

Multiple Choice

Which of the following statements supports the passive approach to a contractionary gap?

A) It is likely that policies will be subject to time lags.
B) Prolonged unemployment may cause the economy's potential real GDP to fall.
C) Workers' skills may grow rusty during a prolonged recession.
D) Unemployed workers may drop out of the labor force during a prolonged recession.
E) Firms may neglect their capital stock during a prolonged recession.