An Economy May Not Quickly and Automatically Eliminate a Recessionary

question 5

Multiple Choice

An economy may not quickly and automatically eliminate a recessionary output gap because wages

• A)have a tendency to rise too quickly.
• B)have a tendency to be sticky downward.
• C)never change in response to changes in the demand for labour.
• D)are flexible but prices have a tendency to be sticky downward.
• E)have a tendency to fall too quickly.

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Definitions:

Illegal Restraint

Actions or measures that unlawfully restrict freedom or movement, often referring to anticompetitive practices or personal liberties.

Public Policy

Government policies designed to address public issues and create laws that reflect the attitudes and beliefs of the general public.

Adhesion Contract

A standardized contract drafted by one party, usually the stronger party, where the weaker party has little to no ability to negotiate terms.

Take-It-Or-Leave-It BASIS

A take-it-or-leave-it basis refers to a situation where an offer is made with the understanding that no negotiation will be entertained, forcing the recipient to accept the offer in its entirety or reject it.