An Economy Experiencing an Expansionary Gap

Multiple Choice

An economy experiencing an expansionary gap

A) operates in an environment in which labor shortages drive up money wages,real wages,and prices
B) results in an excess supply of labor due to rising money wages and prices
C) will self-correct as rising money wages decrease faster than rising prices
D) will experience rising money wages and prices but falling real wages
E) will have excessive involuntary unemployment (e.g.,cyclical unemployment)