Suppose Governments Adopted a Hands-Off Policy to the Economy and a Recessionary

Multiple Choice

Suppose governments adopted a hands-off policy to the economy and a recessionary gap occurred.Which of the following could, in theory, overcome this gap in the long run?  

A)  The only way for the gap to close is for the nominal wage to rise. 
B)  Such a gap could be closed if the nominal wage grew more slowly over time than the price level. 
C)  Only a strong reduction in aggregate demand could close the gap. 
D)  Inflation eventually ends such gaps.