If the Economy Is Faced with Continued Negative Supply Shocks,such

question 40

Multiple Choice

If the economy is faced with continued negative supply shocks,such as annual wage increases for unionized workers,and there is no monetary validation,we can expect

• A)an inflationary gap.
• B)a one-time rise in the price level.
• C)rising unemployment until the wage increases cease,or are offset by other wage decreases.
• D)a shrinking output gap.
• E)peace in labour-management relations.

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