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Mandolina Mandolina
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7 years ago
Suppose that the economy is operating below potential GDP. According to the self-correcting model, the economy will ultimately return to potential because
A) the Fed will expand the money supply.
B) wages and resource prices will fall as contracts expire and are renegotiated.
C) workers will eventually demand higher wages, and resource suppliers will demand higher input prices.
D) aggregate demand will automatically increase enough to push the economy back to potential GDP.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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hecosmetichecosmetic
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Mandolina Author
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7 years ago
YOU SAVED MY LIFE AND MY GRADE!

Thank you!
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