Which View of the Macroeconomy Suggests That the Speed of Adjustment

question 38

Multiple Choice

Which view of the macroeconomy suggests that the speed of adjustment for self-correction would be very quick?

• A) monetarism
• B) mainstream economics
• C) supply-side economics
• D) rational expectations theory

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Definitions:

Firm's Output

The total amount of goods or services produced by a firm over a given period of time.

Profit Per Unit

The amount of income that a company earns above its costs for producing one unit of a good or service.

Short Run

A period in which at least one input, such as capital, is fixed, allowing only some factors, like labor, to change in quantity.

Long Run

A period in economics during which all inputs, including capital, are variable, allowing firms to adjust all aspects of production in response to market changes.