Which of the Following Statements Is Most Consistent with the View

question 43

Multiple Choice

Which of the following statements is most consistent with the view that the economy has a self-corrective mechanism?

• A)When the economy is in a recession,it will remain there until the government steps in to bring the economy out of the recession.
• B)When the economy is in a recession,falling resource prices and declining interest rates will direct the economy back to full employment.
• C)During economic booms,interest rates will fall,causing the economy to fall into a recession.
• D)In a market economy,resource prices,such as wages,can only increase;they can never decrease.