Which of the following statements is (are)correct?
A)A central element in the supply-side position is that,for intermediate-run periods,growth in output is determined by demand and not supply
B)Government policy plays a limited role in causing recessions,so it should play no role in ending them.
C)Many supply-side economists agree that demand plays a role in the short-run determination of income
D)none of the above

Question

Quizplus · Accepted Answer

Statement C is correct as many supply-side economists acknowledge the role of demand in determining income in the short-run. Statements A and B are incorrect as they misrepresent the supply-side position. Supply-side economists believe that long-term growth is driven by supply (such as factors that increase productivity), but that demand can have short-term effects on output. Statement D is incorrect as at least one statement (Statement C) is correct.

Which of the Following Statements Is (Are)correct