The Combination of the Keynes,Pigou,expectations,and Redistribution Effects Results in an Economy

question 130

Multiple Choice

The combination of the Keynes,Pigou,expectations,and redistribution effects results in an economy that self-corrects given a sufficiently low price level,when the four effects give rise to an AD curve that is

• A)vertical.
• B)downward-sloping and that stays to the left of LAS.
• C)downward-sloping and that intersects LAS.
• D)downward-sloping and that stays to the right of LAS.

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Definitions:

Time Frames

Time frames are specified periods during which certain actions are to be undertaken or events are expected to occur.