In a self-correcting model of the economy,rising inflation and rising real interest rates eventually eliminate
A) expansionary gaps.
B) recessionary gaps.
C) autonomous spending.
D) induced spending.
E) unemployment.

Question

Quizplus · Accepted Answer

In a self-correcting model, rising inflation and real interest rates reduce aggregate demand, closing expansionary gaps by bringing output back to potential GDP.

In a Self-Correcting Model of the Economy,rising Inflation and Rising