The elimination of a recessionary gap without the help of a rightward shift of the aggregate demand:
A) would take an unacceptably long period of time.
B) would take 3-6 months.
C) would happen immediately.
D) would happen in a very short period of time.

Question

Quizplus · Accepted Answer

The elimination of a recessionary gap without intervention, such as a rightward shift in aggregate demand, would likely take a long time due to the slow adjustment of prices and wages downwards, which is necessary for the economy to self-correct.

The Elimination of a Recessionary Gap Without the Help of a Rightward