Which of the following statements is false?
A)expansionary fiscal or monetary policy can increase the nation's output temporarily above its natural level
B)expansionary fiscal or monetary policy can used to correct a recession but only at the expense of higher prices in the nation
C)a recession cannot be eliminated automatically even if domestic prices are flexible downward
D)when prices are not flexible downward inflation may be less costly that recession

Question

Quizplus · Accepted Answer

Statement C is false because recessions can indeed be eliminated automatically if domestic prices are flexible downward. This flexibility allows for adjustments in the economy that can help it recover from a recession without the need for policy intervention.

Which of the Following Statements Is False