Those Who Favor Passive Policymaking Argue That All of the Following

question 253

Multiple Choice

Those who favor passive policymaking argue that all of the following exist EXCEPT

• A) perfectly flexible wages and prices.
• B) the trade off between inflation and unemployment is not stable in the short run and is non-existent in the long run.
• C) pure competition is typical.
• D) aggregate demand shocks can influence real GDP and unemployment.

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Definitions:

Variable Expenses

Costs that change in proportion to the level of activity or volume of production.

Sales

The transactions involving the exchange of goods or services for payment.

Net Operating Income

A measure of profitability that calculates the difference between a company's operating revenue and its operating expenses, excluding taxes and interest.

Fixed Expenses

Fixed expenses are costs that do not change with the level of production or sales, such as rent or salaries.