If a market economy has a self-correcting mechanism, when output is lower than potential or full-employment output,
A) changes will occur that will automatically guide the economy back to full employment.
B) resource prices will increase.
C) prolonged unemployment such as was experienced during the Great Depression will occur.
D) the economy will fall into a more severe recession.

Question

Quizplus · Accepted Answer

In a market economy with a self-correcting mechanism, changes will occur automatically to guide the economy back to full employment, such as an increase in demand for goods and services, leading to an increase in production and employment.

If a Market Economy Has a Self-Correcting Mechanism, When Output