In the Long Run,how Would an Active Approach to a Recessionary

question 183

Multiple Choice

In the long run,how would an active approach to a recessionary gap differ from a passive approach to policy?

• A)Both the price level and the level of real GDP would be higher in the long run with the activist solution.
• B)Both the price level and the level of real GDP would be lower in the long run with the activist solution.
• C)The price level would be higher and the level of real GDP would be lower in the long run with the activist solution.
• D)Only the price level would be lower in the long run with the activist solution.
• E)Only the price level would be higher in the long run with the activist solution.