The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on:
A) how quickly planned investment spending adjusts to changes in population growth.
B) how quickly planned consumption spending adjusts to changes in the price level and nominal wages.
C) how quickly technology changes to increase aggregate supply.
D) whether the economy is experiencing a recessionary gap or an expansionary gap.
E) how quickly real wages adjust to restore full employment in the labor market.
Correct Answer:
Verified
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