Which of the following would be a
stabilizing force, one that would make an original
disturbance smaller rather than larger?
When demand for oil rises, the price rises,
discouraging use of oil.
When people expect higher prices, they rush to buy
before the price rises.
People spend more when they are
optimistic, and they become more optimistic as the
When people spend more, increasing
total spending, business responds by spending more on
According to the reading, Keynes
the stabilizing forces in the
the destabilizing forces in the
that the stabilizing forces dominated
in the long run, but not in the short run.
that the destabilizing forces dominated in the long
run, but not in the short run.