If the Economy Is Experiencing an Expansionary Gap,which of the Following

question 34

Multiple Choice

If the economy is experiencing an expansionary gap,which of the following will occur in the long run?

• A)Workers will negotiate nominal wage increases that will shift the SRAS curve to the left.
• B)Workers will negotiate nominal wage increases that will shift the SRAS curve to the right.
• C)Employers will negotiate lower nominal wages (relative to prices)that will shift the SRAS curve to the right.
• D)Employers will negotiate lower nominal wages (relative to prices)that will shift the SRAS curve to the left.
• E)Aggregate demand will fall because workers' incomes are rising.

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Definitions:

Price of Pastries

The cost at which pastries are sold, influenced by ingredients, labor, and market demand.