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When a Recessionary Gap Exists, Actual Output _____ Potential Output

Question 70

Multiple Choice

When a recessionary gap exists, actual output _____ potential output, unemployment is __________ the natural rate, wage rate growth _________ and the AS curve shifts ______ to ___________ the gap.


A) exceeds; higher than; increases; up; increase
B) exceeds; lower than; increases; up; decrease
C) is less than; higher than; falls; down; decrease
D) is less than; lower than; falls; up; eliminate

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