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If a Short-Run Equilibrium with a Recessionary Gap Persists

Question 57

Multiple Choice

If a short-run equilibrium with a recessionary gap persists:


A) low unemployment rates will raise wage rate increases and employment.
B) high unemployment rates will raise wage rate increases and AD.
C) high unemployment rates will reduce wage rate increases and shift AS down.
D) unemployment at the natural rate has no effect on wage rates or AS.

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