If Weak Aggregate Demand Is Pushing the Economy into Recession

question 150

Multiple Choice

If weak aggregate demand is pushing the economy into recession, which of the following must be true?

• A)The economy is at an equilibrium that is on the long-run aggregate supply curve.
• B)The economy is at an equilibrium that is on the long-run Phillips curve.
• C)The economy is at an equilibrium that is not on the long-run Phillips curve.
• D)Contractionary monetary policies will push the economy back to the long-run Phillips curve.
• E)Expansionary fiscal policy will be required to restore equilibrium.

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