-Refer to Exhibit 15-6.Assume that the economy starts out producing Q₁.An economist who believes that the economy is not self-regulating would assert that the government should use _________________ fiscal policy to close the existing ___________________ gap.

Question

-Refer to Exhibit 15-6.Assume that the economy starts out producing Q<sub>1</sub>.An economist who believes that the economy is not self-regulating would assert that the government should use _________________ fiscal policy to close the existing ___________________ gap. A) expansionary; inflationary B) expansionary; recessionary C) contractionary; recessionary D) contractionary; inflationary

Quizplus · Accepted Answer

An economist who believes the economy is not self-regulating and observes that the economy is producing below its potential output would recommend expansionary fiscal policy to close the recessionary gap.