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After a Negative Demand Shock,what Are the Expected Long-Run Adjustments

Question 46

Multiple Choice

After a negative demand shock,what are the expected long-run adjustments?


A) Wages rise,price level rises,and output falls back to potential
B) Wages fall,price level rises,and output falls back to potential
C) Wages fall,price level falls,and output increases back to potential
D) Wages fall,price level rises,and output increases back to potential
E) Wages rise,price level falls,and output increases back to potential.

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