Assuming Prices and Wages Are Flexible, a Recession Will Decrease

question 92

Multiple Choice

Assuming prices and wages are flexible, a recession will decrease the price level, which:

• A)raises nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level.
• B)raises nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level.
• C)reduces nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level.
• D)reduces nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level.

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Definitions:

Amygdala

A part of the brain within the temporal lobe that plays key roles in processing emotions such as fear, anger, and pleasure.

Endorphins

Naturally occurring peptides in the brain that act as neurotransmitters to reduce the perception of pain and can induce feelings of pleasure or euphoria.

Glial Cells

Non-neuronal cells in the nervous system that support, protect, and provide a scaffold for neurons.

Myelin

A fatty substance that wraps around neurons, increasing the speed at which electrical impulses are passed along the nerve cells.