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

question 157

Multiple Choice

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

• A) active policy will shift the short-run aggregate supply curve more than the aggregate demand curve.
• 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 will shift more rapidly than the short-run aggregate supply curve.
• E) active policy will work better than passive policy.

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the account ledger but have not yet been cashed or cleared by the bank.

Debit Memorandum

A document issued by a buyer to a seller indicating a deduction from the amount payable to the seller, often due to returned goods or errors.

Internal Control Problems

Issues or weaknesses in a company's processes that threaten its ability to ensure accurate financial reporting, compliance with laws, and effective and efficient operations.

Internal Control Principle

A fundamental concept in accounting and auditing that refers to the processes, procedures, and measures a company puts in place to safeguard assets, enhance the reliability of financial reports, and ensure compliance with laws and regulations.