# Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ? Correct Answer: A. People will reduce their price expectations and the short run aggregate supply will shift right. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ?

Direct Answer & Quick Reference

The correct option is **A. People will reduce their price expectations and the short run aggregate supply will shift right**.

A. People will reduce their price expectations and the short run aggregate supply will shift right **(Correct Answer)**

B. People will raise their price expectations and aggregate demand will shift left

C. People will raise their price expectations and the short run aggregate supply will shift left

D. People will reduce their price expectations and aggregate demand will shift right

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Verified Key: A. People will reduce their price expectations and the short run aggregate supply will shift right
Solved by 3,702+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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*Source: https://test-prep.blog/mcq/refers-to-exhibit-4-suppose-the-economy-is-operating-in-a-recession-such-as-poin-78281dd2-e349-4232-acd3-e3760b58faf4*
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