Economist A believes the economy is self-regulating.Economist B believes that wages and prices are inflexible downward.Economist C believes that the AS curve is vertical.Economist D believes that crowding out is likely to be complete.Which economist is most likely to advocate for expansionary fiscal policy in the in the form of greater government spending to remove an economy from a recessionary gap?

Question

Quizplus · Accepted Answer

Economist B, who believes that wages and prices are inflexible downward, is most likely to advocate for expansionary fiscal policy. This belief suggests that in the face of a recession, the economy cannot easily adjust back to full employment through lower wages and prices, thus requiring government intervention through increased spending to stimulate demand and close the recessionary gap.

Economist a Believes the Economy Is Self-Regulating