The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________.
A)raises; recession; lowers; expansion
B)raises; expansion raises; recession
C)lowers; expansion; lowers; recession
D)lowers; recession; raises; expansion

Question

Quizplus · Accepted Answer

During a recession, the automatic mechanism lowers the price level since there is a decrease in demand for goods and services. During an expansion, the automatic mechanism raises the price level since there is an increase in demand for goods and services.

The Automatic Mechanism ________ the Price Level in the Case