Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, this economy
A) is highly susceptible to recessions and high unemployment.
B) faces regularly ﬂuctuating output levels in response to demand shocks.
C) is capable of always producing at its optimal capacity.
D) can only lessen the impacts of business cycles through active government policy.

Question

Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, this economy
A) is highly susceptible to recessions and high unemployment. 
B) faces regularly ﬂuctuating output levels in response to demand shocks. 
C) is capable of always producing at its optimal capacity. 
D) can only lessen the impacts of business cycles through active government policy.

Quizplus · Accepted Answer

The Answer of  Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, this economy
A) is highly susceptible to recessions and high unemployment. 
B) faces regularly ﬂuctuating output levels in response to demand shocks. 
C) is capable of always producing at its optimal capacity. 
D) can only lessen the impacts of business cycles through active government policy.

Refer to the ﬁGure