Those Who Favor a Passive Approach to Policy Think That

question 111

Multiple Choice

Those who favor a passive approach to policy think that all of the following conditions will allow the economy to bring itself out of a recessionary gap except one.Which is the exception?

• A)lower real wages
• B)a shortage of labor
• C)lower production costs
• D)a lower expected price level
• E)a rightward shift in the short-run aggregate supply curve

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Definitions:

Write-Offs

A reduction in the value of an asset or earnings by the amount of an expense or loss, usually deemed uncollectible by any business; charges that are deemed uncollectible by any business.

Uncollectible Charges

Fees for goods or services provided that are not expected to be paid by the customer, often written off as bad debts by the business.

Retained Earnings

Profit accumulated over time by a company, after dividend payments to shareholders, which is reinvested in its business.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.