According to the Active Policy Position, How Should Policymakers Eliminate

question 20

Multiple Choice

According to the active policy position, how should policymakers eliminate a recessionary gap?  

• A) by decreasing wages 
• B) through the use of wage and price controls 
• C) by stimulating aggregate demand 
• D) by doing nothing

---

Definitions:

Long-term Securities

Financial instruments that typically have a maturity period of more than one year and are used to finance longer-term investments.

Temporary Working Capital

The additional working capital needed to support fluctuations in business activity above the normal level.

Capital Requirement

The amount of capital a bank or financial institution must hold to shield against financial risk and comply with regulatory standards.

Net Operating Working Capital

The difference between a company's current assets and its current liabilities, excluding interest-bearing debt.