Exhibit 16-2
-In Exhibit 16-2,the aggregate demand in the economy is represented by AD₀ and the short run aggregate supply by SRAS₁₂₀.If a passive policy is followed to eliminate the recessionary gap,the economy will move from its current short-run equilibrium to point _____.

Question

Exhibit 16-2 Exhibit 16-2 -In Exhibit 16-2,the aggregate demand in the economy is represented by AD<sub>0</sub> and the short run aggregate supply by SRAS<sub>120</sub>.If a passive policy is followed to eliminate the recessionary gap,the economy will move from its current short-run equilibrium to point _____. A) A B) B C) F D) D E) E

Exhibit 16-2 -In Exhibit 16-2,the aggregate demand in the economy is represented by AD<sub>0</sub> and the short run aggregate supply by SRAS<sub>120</sub>.If a passive policy is followed to eliminate the recessionary gap,the economy will move from its current short-run equilibrium to point _____. A) A B) B C) F D) D E) E

-In Exhibit 16-2,the aggregate demand in the economy is represented by AD₀ and the short run aggregate supply by SRAS₁₂₀.If a passive policy is followed to eliminate the recessionary gap,the economy will move from its current short-run equilibrium to point _____.

Quizplus · Accepted Answer

A passive policy implies no intervention, allowing the economy to self-correct. Over time, wages and prices adjust, shifting the SRAS curve to the right, moving the economy to point F, where long-run equilibrium is restored.

Exhibit 16-2 -In Exhibit 16-2,the Aggregate Demand in the Economy Is Represented