When Economists Refer to the Economy's Self-Correcting Mechanism, They Are

question 26

Multiple Choice

When economists refer to the economy's self-correcting mechanism, they are referring to the fact that the

• A)economy will react automatically to a recessionary gap through inflation.
• B)economy will react automatically to an inflationary gap through deflation.
• C)economy will react automatically to an inflationary gap through inflation.
• D)simple multiplier is greater than the complex multiplier.

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Definitions:

Paycheck

A check issued to an employee in payment for their work.

Apostrophes

Punctuation marks used to indicate either possession (e.g., Harry’s book) or the omission of letters or numbers (e.g., can’t for cannot).

Bicycle

A bicycle is a human-powered, pedal-driven vehicle with two wheels attached to a frame, one behind the other.

Fair Die

A die that has an equal probability of landing on any of its faces when thrown.