-Refer to Exhibit 15-l.A monetarist would claim that in a recessionary gap,the economy would move on its own from point
A) B to point C.
B) B to point A.
C) A to point B.
D) D to point C.

Question

-Refer to Exhibit 15-l.A monetarist would claim that in a recessionary gap,the economy would move on its own from point
A) B to point C. 
B) B to point A. 
C) A to point B. 
D) D to point C.

Quizplus · Accepted Answer

Monetarists believe that the economy is self-correcting and will naturally return to full employment. In a recessionary gap, they argue that the economy will move from a point of lower output (B) back to full employment (A) without the need for government intervention.

-Refer to Exhibit 15-L