How Will a Recession End If an Economy Is Left

question 88

Multiple Choice

How will a recession end if an economy is left to self-correct?

• A) Taxes eventually will rise, which gives the government more spending power.
• B) Taxes eventually will fall, which leads to an increase in aggregate demand.
• C) Sticky wages eventually will fall, which allows labor markets to return to equilibrium and full employment.
• D) Sticky wages eventually will rise, which leads to an increase in aggregate demand.