According to the Active Policy Approach,the Elimination of a Recessionary

question 146

Multiple Choice

According to the active policy approach,the elimination of a recessionary policy _____.

• A)can only be achieved by decreasing wages
• B)requires a public policy of wage and price controls
• C)should be accomplished by stimulating aggregate demand
• D)will increase unemployment
• E)will cause a recession

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Definitions:

Losses

Financial reductions resulting from the operation of a business, particularly when expenses exceed revenues.

Shut Down

In economics, shut down refers to a short-term decision by a firm to cease production because operating costs exceed the revenue generated, particularly when prices fall below variable costs.

Increasing-Cost Industry

An industry in which costs of production increase as output is increased, often due to factors like limited resources or higher input prices.

LRAC Curve

Stands for Long-Run Average Cost curve, which shows the lowest average cost of producing different levels of output when all inputs, including capital, are variable.