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The Reason Why Self-Correction Works to Close a Recessionary Gap

Question 185

Multiple Choice

The reason why self-correction works to close a recessionary gap is because


A) a labor shortage causes money wages to increase
B) a labor surplus causes money wages to increase
C) a labor shortage causes money wages to fall
D) a labor surplus causes money wages to fall
E) falling money wages shift the short-run aggregate supply curve to the left

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