Which of the following pieces of evidence contradicts the self-correcting mechanism contained in the AD-AS model?
A) During the Great Depression,the price level fell but it did not seem to stimulate aggregate demand.
B) In a recession,an expansionary policy stimulates aggregate demand.
C) The price level,typically,does not fall during a recession.
D) In the short-run,expansionary policies can lower unemployment.
E) During the Great Depression,the price level fell but it did not seem to stimulate aggregate demand and the price level,typically,does not fall during a recession.
Correct Answer:
Verified
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