Figure 12-1
-Refer to Figure 12-1. Assume that the economy is initially at Y₁. A nonintervention policy Jwould result in the restoration of potential output by allowing the

Question

Figure 12-1 -Refer to Figure 12-1. Assume that the economy is initially at Y₁. A nonintervention policy Jwould result in the restoration of potential output by allowing the

Quizplus · Accepted Answer

A nonintervention policy would allow the market to self-correct and the short-run aggregate supply curve to shift to the right, eventually restoring output to potential.

Figure 12-1 -Refer to Figure 12-1. Assume That the Economy Is Initially