According to Policymakers Who Favour a Passive Approach to Policy

question 86

Multiple Choice

According to policymakers who favour a passive approach to policy, why will a recessionary gap be eliminated by a passive approach?  

• A) because prices and wages will rise rapidly 
• B) because prices and wages are flexible 
• C) because the aggregate demand curve will shift to the right 
• D) because the aggregate demand curve will shift to the left

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