Keynesian prediction of the economy that is in recession.

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Chapter 16.A, Problem 9SQ

To determine

Keynesian prediction of the economy that is in recession.

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The business cycle occurs because A. the government is constantly trying to produce an inflationary gap, but expenditures in the economy cannot keep pace with the government's agenda B. aggregate demand and short-run aggregate supply fluctuate, but the money wage rate does not adjust quickly enough to keep real GDP at potential GDP C. potential GDP is increasing, and increases in aggregate demand cannot keep pace with increases in long-run aggregate supply D. the Bank of Canada is constantly increasing the quantity of money.

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