In general,it may be expected that the speed with which a particular economy corrects an output gap
A) depends directly on the size of the output gap.
B) depends inversely on the size of the output gap.
C) is unrelated to the size of the output gap.
D) depends only on the monetary policy reaction function.
E) is unrelated to the monetary policy reaction function.

Question

Quizplus · Accepted Answer

Larger output gaps often lead to stronger policy responses and faster adjustments, as there is more pressure to return to potential output.

In General,it May Be Expected That the Speed with Which