Those Who Favor a Passive Approach to Policy Often Argue

question 5

Multiple Choice

Those who favor a passive approach to policy often argue that changes in prices and wages will shift the:

• A)short-run aggregate supply curve before active policy shifts the aggregate demand curve.
• B)short-run aggregate supply curve only after active policy shifts the aggregate demand curve.
• C)short-run aggregate supply curve more than active policy shifts the aggregate demand curve.
• D)short-run aggregate supply curve less than active policy shifts the aggregate demand curve.
• E)short-run aggregate supply curve in a direction opposite the shift in the aggregate demand curve

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