If the Time for an Economy to Self-Correct Is Shorter

question 116

Multiple Choice

If the time for an economy to self-correct is shorter than the active policy lags,then:

• A)active policy should be strengthened.
• B)active policy is likely to destabilize the economy.
• C)time is required to accumulate evidence that the economy is performing below its potential.
• D)the aggregate demand curve shifts more rapidly than the short-run aggregate supply curve.
• E)active policy will work better than passive policy.