If an Economist Who Favors a Passive Approach Observes a Drop

question 103

Multiple Choice

If an economist who favors a passive approach observes a drop in real GDP caused by a decrease in aggregate demand,she is most likely to think that

• A)the economy will recover by itself before discretionary policy can correct the situation
• B)discretionary policy will correct the situation before the economy recovers by itself
• C)the imposition of policy rules will correct the situation before the economy recovers by itself
• D)aggregate supply will decrease to compensate for the decrease in aggregate demand
• E)the economy will not recover by itself

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Definitions:

Borderline Personality Disorder

A mental health disorder characterized by pervasive instability in moods, self-image, behavior, and relationships, often resulting in impulsive actions and problems in personal relationships.

Schizophrenia

A severe mental health disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

Social Anxiety Disorder

A mental health condition characterized by an intense, persistent fear of being watched and judged by others, often leading to avoidance of social situations.

Antisocial Personality Disorder

A psychological condition marked by persistent neglect or infringement of other people's rights.