Exhibit 15-2

-Refer to the graph in the exhibit.According to policymakers who favour a passive approach to policy, where will the economy end up once the expansionary gap is eliminated?
A) at point A
B) at point B
C) at point C
D) CANNOT tell from the information provided

Question

Exhibit 15-2
 
-Refer to the graph in the exhibit.According to policymakers who favour a passive approach to policy, where will the economy end up once the expansionary gap is eliminated?  
A) at point A 
B) at point B 
C) at point C 
D) CANNOT tell from the information provided

Quizplus · Accepted Answer

Policymakers who favor a passive approach believe that the economy will self-correct to its natural level of output, which is typically represented by point B, where the economy is at full employment without an expansionary or recessionary gap.

Exhibit 15-2 -Refer to the Graph in the Exhibit.According to Policymakers Who