Corporate profits are taxed twice.

Based on the evidence, most economists believe that the self-correcting mechanism operates

a. slowly with prices, but quickly with wages. b. slowly with wages, but quickly with prices. c. very slowly with wages. d. efficiently, so that stabilization policy is not necessary.

An inflation rate below the target rate will result in:

A. a movement down along the monetary policy reaction curve and a movement down the dynamic aggregate demand curve. B. a movement up along the monetary policy reaction curve and a movement down the dynamic aggregate demand curve. C. a movement up along the monetary policy reaction curve and a leftward shift of the dynamic aggregate demand curve. D. a movement up along the monetary policy reaction curve and a rightward shift of the dynamic aggregate demand curve.