Multiple Choice
An economy may not quickly and automatically eliminate a recessionary output gap because wages
A) never change in response to changes in the demand for labour.
B) have a tendency to be sticky downward.
C) have a tendency to fall too quickly.
D) have a tendency to rise too quickly.
E) are flexible but prices have a tendency to be sticky downward.
Correct Answer:
Verified
Correct Answer:
Verified
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