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-Refer to Figure 13

Question 58

Multiple Choice

-Refer to Figure 13.6. If wage rates had been increasing at 3% a year and a recessionary gap lowered that rate of wage growth to 2% a year: A) AS would be unaffected and remain at AS<sub>0.</sub> B) the level of real GDP would fall from Y<sub>P</sub> to Y<sub>0.</sub> C) AS would shift up from AS<sub>1</sub> to AS<sub>0</sub>. D) AS would shift down from AS<sub>0</sub> to AS<sub>1</sub>.
-Refer to Figure 13.6. If wage rates had been increasing at 3% a year and a recessionary gap lowered that rate of wage growth to 2% a year:


A) AS would be unaffected and remain at AS0.
B) the level of real GDP would fall from YP to Y0.
C) AS would shift up from AS1 to AS0.
D) AS would shift down from AS0 to AS1.

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