If the Economy Is Experiencing an Inflationary Output Gap,the Adjustment

question 79

Multiple Choice

If the economy is experiencing an inflationary output gap,the adjustment process operates as follows:

• A)wages do not adjust,but the AD curve shifts to the right.
• B)wages fall,unit costs fall,and the AD curve shifts rightward.
• C)wages rise,unit costs rise,and the AS curve shifts leftward.
• D)wages rise,unit costs rise,and the AS curve shifts rightward.
• E)wages fall,unit costs fall,and the AS curve shifts rightward.

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Definitions:

Productive Forgetting

The ability to abandon a solution that isn’t working in favor of a new one.

Supervisory Support

Assistance and guidance provided by supervisors or managers to their subordinates, typically aimed at encouraging well-being and improving performance.

Innovation

The process of creating, developing, and implementing new ideas, products, or methods that bring novel solutions to problems or improvements to existing conditions.

Creativity

The ability to generate new ideas, solutions, or innovations that are original and valuable.