If the economy was operating above full employment, it could return to full employment
A) by itself, through rising wages and prices.
B) through decreases in government spending or tax increases.
C) through open market sales.
D) all of the above

Question

Quizplus · Accepted Answer

When an economy is operating above full employment, it can return to full employment through various mechanisms: self-adjustment via rising wages and prices, fiscal policy adjustments like decreases in government spending or tax increases, and monetary policy actions such as open market sales. These measures help cool down the economy, reducing inflationary pressures and bringing the economy back to its full employment level.

If the Economy Was Operating Above Full Employment, It Could