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

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If there are continued negative supply shocks, such as annual wage increases for unionized workers, and no monetary validation, it can lead to rising costs for businesses, which can cause them to lay off workers to maintain their profits. This, in turn, leads to rising unemployment until the wage increases cease, or are offset by other wage decreases. Therefore, the best choice is C.

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