An economy that self-corrects a contractionary gap will experience falling nominal wages, rising real wages and falling output.

Name: An economy that self-corrects a contractionary gap will experience falling nominal wages, rising real wages and falling output.
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Question

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An economy that self-corrects a contractionary gap will experience falling nominal wages, which leads to lower production costs, increased output, and eventually rising real wages as the economy returns to full employment.

An Economy That Self-Corrects a Contractionary Gap Will Experience Falling