Suppose the Economy Is Experiencing a Recessionary Gap

question 122

Multiple Choice

Suppose the economy is experiencing a recessionary gap. In the long run, if aggregate demand does not change, the money wage rate ________, unemployment ________, and the price level ________.

• A)rises; rises; rises
• B)falls; falls; falls
• C)rises; falls; rises
• D)falls; rises; falls

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Definitions:

Alcoholic Fermentation

A biological process by which sugars such as glucose, fructose, and sucrose are converted by yeast or bacteria into cellular energy, producing ethanol and carbon dioxide as side products.

Acetaldehyde

A volatile, flammable, and colorless liquid compound, which is a common intermediate in the synthesis of various chemicals and a byproduct of alcohol metabolism.

NADH

Nicotinamide adenine dinucleotide (NADH) is a coenzyme found in all living cells, involved in redox reactions, carrying electrons from one reaction to another.

Ethanol

A volatile, flammable, colorless liquid alcohol widely used as a biofuel, in alcoholic beverages, and as a solvent in the pharmaceutical industry.