If the Economy Is in a Recessionary Gap

Multiple Choice

If the economy is in a recessionary gap:

A) it will remain in a recession forever without any kind of government intervention.
B) nominal wages will fall and SRAS will shift to the right until the economy is at full employment.
C) AD will shift to the right and prices of goods will rise until the economy goes back to producing potential output.
D) nominal wages will rise, SRAS will shift to the left, and the economy will eventually restore itself.