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AD-AS & Phillips — Self-Correction & Long Run: True, False or Uncertain? #Shorts
True, False, or Uncertain? Test yourself on AD-AS & Phillips. Statement: In a self-correcting economy, the government must always use fiscal stimulus to close a recessionary gap. Answer: FALSE The self-correction mechanism can close the gap on its own through downward wage adjustment over time. Subscribe to Macro Economics with Michael for more ...
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