Assuming Prices and Wages Are Flexible, a Recession Will Decrease

question 92

Multiple Choice

Assuming prices and wages are flexible, a recession will decrease the price level, which:

• A)raises nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level.
• B)raises nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level.
• C)reduces nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level.
• D)reduces nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level.

---

Definitions:

Bird Houses

Structures designed and built specifically for birds to live in or use for nesting.

Chemical Manufacturer

A company involved in the production of chemicals through physical or chemical processes, serving various industries such as pharmaceuticals, agriculture, and materials.

Grams

Grams are a unit of mass in the metric system, used to measure small weights of substances or objects, equivalent to one thousandth of a kilogram.