If the Correction Process That Eventually Eliminates Output Gaps Works

question 127

Multiple Choice

If the correction process that eventually eliminates output gaps works very slowly,so that actual output differs from potential output for long periods of time,then active

• A) stabilization policies are probably not justified.
• B) stabilization policies may end up doing more harm than good.
• C) use of monetary and fiscal policy can cause actual output to overshoot potential output.
• D) use of monetary and fiscal policy can help to stabilize output.
• E) stabilization policies can cause the output gap to become larger.

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Definitions:

Authority's Proximity

Refers to the physical or perceived closeness of an individual to a figure or institution of authority.

Legitimate Authority

The rightful or morally justified power held by an entity or individual, which is recognized and followed by others.

Unconscious Desire

Wishes or wants that influence behavior without becoming part of conscious awareness.

Ethical Concerns

Considerations related to determining what is right or wrong in a moral sense, often applied in professional and personal decision-making.