Assuming the Economy Is Experiencing a Recessionary Gap, Classical Economists

question 7

Multiple Choice

Assuming the economy is experiencing a recessionary gap, classical economists predict that:

• A)wages will remain fixed.
• B)monetary policy will sell government securities.
• C)higher wages will shift the short-run aggregate supply curve leftward.
• D)lower wages will shift the short-run aggregate supply curve rightward.
• E)none of these.