With the self-correcting mechanism, if a negative demand shock occurs,
a. a decrease in wage rates will lead to a decrease in the price level so that the economy returns to full employment
b. the price level will increase, causing equilibrium GDP to return to its original level
c. the wage rate will eventually increase, restoring GDP to its full-employment level
d. the price level will remain constant
e. there will be no effect in the long run
A
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Government transfer paymentsare called "automatic stabilizers" because:
a. Government transfer paymentsare automatically countercyclical. b. Government transfer paymentsare automatically procyclical. c. Government transfer paymentsis automatically acyclical. d. None of the above.
What happens to bond prices when the interest rate decreases?
a) They would decrease. b) They would increase. c) They would stay the same. d) They would fluctuate based on the quantity of money.
A decline in the price of resource A will:
A. increase the demand for complementary resource B. B. shift the demand curve for A to the left. C. shift the demand curve for A to the right. D. reduce the demand for complementary resource B.
After 2000, rapid economic growth continued for the high-growth Asian economies
Indicate whether the statement is true or false