An economy experiences a recessionary gap. As the economy adjusts to full employment, the money wage rate

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During a recessionary gap, to adjust to full employment, the money wage rate typically falls. This reduction in wage rates decreases production costs for businesses, which in turn increases the quantity of goods and services that firms are willing to produce at each price level. This is represented by a rightward shift in the aggregate supply curve, not the aggregate demand curve.

An Economy Experiences a Recessionary Gap