Those Who Favor a Passive Approach to Policy Often Argue

question 72

Multiple Choice

Those who favor a passive approach to policy often argue that changes in prices and wages will shift the short-run aggregate supply curve

• A)before active policy shifts the aggregate demand curve
• B)only after active policy shifts the aggregate demand curve
• C)more than active policy shifts the aggregate demand curve
• D)less than active policy shifts the aggregate demand curve
• E)in a direction opposite to the shift in the aggregate demand curve caused by active policy

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Definitions:

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, both having reasonable knowledge of all relevant facts and neither being under compulsion to buy or sell.

Unrealized Increase

The increase in value of an asset that has not yet been sold or cashed in, thus not yet resulting in actual income.

Recognition

In accounting, recognition refers to the process of including an item in the financial statements of an entity, acknowledging it as an asset, liability, revenue, or expense.

Unrealized Holding

Refers to the increase or decrease in the value of an investment that has not yet been sold by the holder.