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Question
If a group of economists believes the following points are true, which is likely to be their policy making stance?
Aggregate demand shocks have no long run effect on real Gross Domestic Product (GDP) or unemployment.
Pure competition is widespread throughout the economy.
Real wages are flexible.
The Phillips Curve trade -off does not exist in the long run.
A) They will support active policy making.
B) They will support passive policy making.
C) They will support discretionary policy making.
D) They will argue that any attempt at economic policy making is futile.
Answer
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