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

question 29

Multiple Choice

Which of the following statements supports the passive approach to a recessionary 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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Definitions:

Revenue Management

A strategy to predict consumer behavior at the market level and optimize product availability and price to maximize revenue growth.

Seasonal Peaks

Times of the year when demand for a product or service is significantly higher than usual, often due to factors like holidays or weather.

Wasted Capacity

The portion of production capability or resources that goes unused or is not effectively utilized.

Margin Reduction

The decrease in the difference between the cost to produce a good or service and its selling price, often aiming to increase market competitiveness.