Use the Following to Answer Questions

question 238

Multiple Choice

Use the following to answer questions
Figure: Aggregate Demand and Fiscal Policy
-(Figure: Aggregate Demand and Fiscal Policy) Refer to the figure.For an economy in a recession at point Z,what will happen in the long run in the absence of any government action to counter the recession?

• A) Wages will become flexible and spending growth will recover to increase aggregate demand,moving the economy to point X.
• B) Wages will remain sticky and aggregate demand will fall farther,moving the economy to point Y.
• C) Aggregate demand will rise above the LRAS curve,moving the economy to point W.
• D) The economy will remain in a recession at point Z.

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Definitions:

Work Experience

The accumulation of employment history and skills acquired by an individual over time.

Greater Flexibility

An increased ability to adapt or respond to changing conditions or situations without significant loss of functionality or efficiency.

Employment Manual

A firm’s handbook or written statement that specifies the policies and procedures that govern the firm’s employees and employer-employee relationships.

Casual Dress Code

A relaxed and informal style of clothing allowed or prescribed in certain environments, emphasizing comfort and personal expression.