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The Economy's Self-Correcting Mechanism Is Such That Demand Shocks Are

question 138

True/False

The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand.


Definitions:

Adjusting Entry

An accounting record made to update the balances of accounts to reflect the true financial position before preparing financial statements.

Unexpired Insurance

The portion of the insurance premium that has not yet expired or been used up, considered a prepaid expense.

Office Supplies

Consumable items that are used in the daily operations of an office like pens, paper, and staplers.

Adjusting Entry

A journal entry made in accounting to update the record of revenues earned or expenses incurred that have not been previously recorded.

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