An Economy May Not Quickly and Automatically Eliminate a Recessionary

Multiple Choice

An economy may not quickly and automatically eliminate a recessionary output gap because wages

A) have a tendency to rise too quickly.
B) have a tendency to be sticky downward.
C) never change in response to changes in the demand for labour.
D) are flexible but prices have a tendency to be sticky downward.
E) have a tendency to fall too quickly.