Which of the Following Statements Supports the Passive Approach to Close

question 89

Multiple Choice

Which of the following statements supports the passive approach to close a recessionary gap?

• A) It is likely that policies will be subject to time lags.
• B) Prolonged unemployment may cause an economy's potential real GDP to fall.
• C) Workers' skills may grow rusty during a prolonged recession.
• D) It is likely that unemployed workers will drop out of the labor force.
• E) Firms may neglect their capital stock during a prolonged recession.

Distinguish between demand and quantity demanded.

Understand the difference between a decrease in quantity demanded and a decrease in demand.

Recognize how changes in consumer tastes affect market demand.

Identify the effects of price changes on quantity demanded.

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Definitions:

Physiological

Pertaining to the normal functioning and activities of living organisms and their parts.

Situational

Relating to or dependent upon a particular set of circumstances or environment.

Cognitive

Relating to mental processes such as perception, memory, thought, and problem-solving, crucial for understanding, learning, and decision-making.

Social Referencing

Using another person’s reaction to a situation to form one’s own assessment of it.