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If Resource Prices Are "Sticky" Downward and a Recessionary Gap

Question 3

Multiple Choice

If resource prices are "sticky" downward and a recessionary gap develops in an economy, the short-run aggregate supply curve will _____


A) shift leftward to return the economy to its potential output.
B) shift rightward to return the economy to its potential output.
C) become a horizontal straight line.
D) not shift rightward to return the economy to its potential output.
E) become the long-run aggregate supply curve.

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