In the Long Run, Inflationary and Recessionary Gaps Are Self-Correcting

question 137

Multiple Choice

In the long run, inflationary and recessionary gaps are self-correcting because eventually:

• A) nominal wages rise to close an inflationary gap or fall to close a recessionary gap.
• B) the government applies the right combination of fiscal and monetary policies.
• C) the multiplier compensates for the negative supply or demand shocks.
• D) nominal wages rise to close a recessionary gap and fall to close an inflationary gap.

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Definitions:

Local Environment

The immediate surroundings or conditions in which an organization operates, including the social, cultural, and economic aspects influencing its performance.

Organisational Culture

The shared values, beliefs, and norms that influence the way employees behave within an organization.

Institutional Identity

The unique set of characteristics, values, and culture that defines an organization and distinguishes it from others.

Mission Statement

A concise declaration of an organization's core purpose and focus that informs its strategies, decisions, and operations to guide it towards its goals.