Which of the Following Statements Supports the Passive Approach to a Contractionary

question 151

Multiple Choice

Which of the following statements supports the passive approach to a contractionary gap?

• A)It is likely that policies will be subject to time lags.
• B)Prolonged unemployment may cause the economy's potential real GDP to fall.
• C)Workers' skills may grow rusty during a prolonged recession.
• D)Unemployed workers may drop out of the labor force during a prolonged recession.
• E)Firms may neglect their capital stock during a prolonged recession.

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