Figure 8-2

-In Figure 8-2 above,a policy that maintains the level of real GDP in the advent of an adverse supply shock is a(n)
A)extinguishing policy;M.
B)neutral policy;L.
C)price-control policy;N.
D)accommodating policy;N.

Question

Figure 8-2
 
-In Figure 8-2 above,a policy that maintains the level of real GDP in the advent of an adverse supply shock is a(n)
A)extinguishing policy;M. 
B)neutral policy;L. 
C)price-control policy;N. 
D)accommodating policy;N.

Quizplus · Accepted Answer

An accommodating policy seeks to maintain the level of real GDP in the event of an adverse supply shock, while a neutral policy does not take any action and a price-control policy seeks to influence prices rather than output. An extinguishing policy aims to reduce the level of real GDP.

Figure 8-2 -In Figure 8-2 Above,a Policy That Maintains the Level of Maintains