Multiple Choice
Which of the following is not consistent with a self-correcting economy?
A) Falling wages that correct a recessionary gap
B) Falling prices that correct a recessionary gap
C) Rising prices that correct an expansionary gap
D) Tendency of the short-run aggregate supply to shift until it intersects aggregate demand at potential GDP
E) An active approach to a recession or depression
Correct Answer:

Verified
Correct Answer:
Verified
Q115: The short-run Phillips curve shows that as
Q116: If the time for an economy to
Q117: Both those who favor an active approach
Q118: The effectiveness lag for monetary policy is
Q119: The short-run Phillips curve is based upon
Q121: The short-run Phillips curve shows that:<br>A)the economy
Q122: The initial Phillips curve relationship implied that
Q123: According to the rational expectations school,people base
Q124: According to economists of the rational expectations
Q125: During inflation,the optimal discretionary fiscal policy would