To support the argument for an active role for government in stabilizing the economy, it must be true that
A) consumers are not rational and that not all wages and prices are flexible.
B) not all wages and prices are flexible and that government must be able to react quickly enough.
C) government must be able to react quickly enough and that shocks to the economy be primarily due to aggregate supply shocks.
D) shocks to the economy be primarily due to aggregate supply shocks and that consumers are not rational.
B
You might also like to view...
Refer to Table 9-6. What is the value of $A in stage 1?
A) $100 B) $200 C) $600 D) $800
The real wage is equal to the:
a. wage measured in terms of the quantity of goods and services it buys b. wage measured in terms of the dollar value of the goods and services it buys. c. nominal wage net of taxes paid on wages. d. non-wage benefits received by workers. e. product of the nominal wage and the price level.