Question 5-7 are base on the following passage.

    Although the Austrian school of economic thought sometimes called the Vienna school, shares with neoclassical economics a focus on the actions of the individual actor, it distinguishes itself most from this more orthodox perspective with its influential Austrian Business Cycle Theory (ABCT). ABCT represents an attempt by the school's theorists to explain the "boom and bust" cycle in modern economies. Proponents of the ABCT claim that Economic recessions will not occur in a purely free market system because it is highly unlikely that a preponderance of business leaders and entrepreneurs will simultaneously engage in risky economic practices. Thus, economic downturns must instead result from unnatural interference with the economic system. The ABCT claims that this interference comes in the form of banks artificially manipulating interest rates. Economists from the Austrian school contend that banks, by creating new money, drive down interest rates, which fools investors into thinking that the supply of saved funds is larger than it actually is. This misapprehension of reality causes businesses and entrepreneurs to Focus their energies on investment, which causes the economy to shift from emphasizing consumer goods to capital goods. For a short while the economy booms. However, the investors soon find that their speculation was based on incorrect assumptions about the economy and has resulted in an increase in production for which there is no comparable demand from consumers. A recession then occurs as the economy attempts to correct itself after this period of wastefull inverstment. ABCT has received a fair share of criticsim. most problematic the theory requires businesspersons and entrepreneurs to continually act irrationally by making unsound investment during periods of low interest rates. however, ABCT and the Austria School ingeneral have remained influential in economic circles due to their emphasis on the time preferences of individuals. while neoclassical economists make use of the idea of time preferences in some economic analyses, the Austrian School makes time preferences a major focus of its theoretical investigations, leading to a number of interisting hypotheses about economic activities.

It can be inferred from the passage that proponents of the ABCT that an economy in the midst of a recession ....