When GDP Is Below Potential Output, Prices Fall Because

Multiple Choice

When GDP is below potential output, prices fall because

A) firms can easily find new workers and are forced to offer higher wages, which decreases the costs of production.
B) firms can easily find new workers and can offer lower wages, which decreases the costs of production.
C) firms find it difficult to hire and retain workers and are forced to offer higher wages, which increases the costs of production.
D) firms find it difficult to hire and retain workers and can offer higher wages, which decreases the costs of production.