Suppose an Economy Is Operating with a Recessionary Gap

question 53

Multiple Choice

Suppose an economy is operating with a recessionary gap. In this case, policymakers would seek to move the economy

• A) back down the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• B) up the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• C) back down the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.
• D) up the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.

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